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Virtual banks cannot play one-size-fits-all in Singapore: OCBC CEO
FINTECHS seeking inroads here as a "digital-only bank" cannot operate on a one-size-fits-all if they are to compete in a well-banked environment in Singapore, OCBC's group chief executive officer Samuel Tsien told The Business Times.
His comments come in response to the statement from the Monetary Authority of Singapore (MAS) this morning saying that MAS is studying whether to admit digital-only banks that have emerged out of fintech firms as licensed entities. When asked if Singapore will offer virtual bank licences, an MAS spokesman said MAS has been reviewing how digital-only banks with a "non-bank" parentage can offer value, and how potential risks will be managed and contained.
OCBC's Mr Tsien noted that MAS is not rushing into making a decision on the model for virtual banking for Singapore. This reflects its reputation as a "forward-looking yet prudent and thoughtful regulator" in positioning Singapore as a leading financial centre, he told BT.
"With the rapid evolution of fintech over the past several years – where fintechs began as startups looking to disrupt financial institutions, to fintechs as ecosystems orchestrated by large technology companies – it is unavoidable that you will see digital-only banks without bank parentage wanting to operate here," he said.
"However, the operating model of such banks cannot be a one-size-fits-all regardless of the operating environment. Singapore’s domestic market is small. Almost every Singapore resident is well-banked. Incumbent financial institutions like OCBC are already investing significantly in technology and entering into partnerships to build strong digital capabilities to respond to customer expectations and improve performances. The digital model must have regional aspirations."