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BT EXCLUSIVE: DIGITAL BANKS

Zall joins list of Chinese players eyeing wholesale digital bank in Singapore

It is teaming up with Japanese conglomerate Marubeni and Singapore supply chain platform provider GeTS

Singapore

CHINA-BASED Zall Smart Commerce Group is bidding for a digital wholesale bank licence in Singapore, joining a growing list of Chinese contenders in the digital banking scene.

Zall is leading a consortium comprising Japanese trading conglomerate Marubeni Corporation and Singapore supply chain platform provider Global eTrade Services (GeTS) for the wholesale banking licence, Zall confirmed to The Business Times in response to queries.

The proposed digital entity aims to bridge the funding gap and support the expansion of local small and medium-sized enterprises (SMEs) and micro-SMEs into Asia.

The three partners will build on their global network and resources in China, Japan and South-east Asia to provide SMEs with "growth-focused insights and sustainable finance", Zall deputy chief executive Peter Yu told BT in a press statement.

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Hong Kong-listed Zall said it operates Asia's largest business-to-business (B2B) trade platform in China and South-east Asia. In 2018, the group achieved a gross merchandise value of more than 600 billion yuan (S$117 billion), serving over one milllion SME customers worldwide.

Zall has operated Z-Bank in China since 2017 - one of the top five Chinese digital banks serving more than 12 million SME and individual customers.

The firm told BT it will bring its digital capabilities - powered by advanced technologies including artificial intelligence, blockchain and big data - to its Singapore consortium.

Japan's Marubeni will offer its "deep financial business experience", while GeTS can work on building "global supply chains" off its G2B (government-to-business) and B2B "domain expertise and networks", Zall told BT.

The trio appear to be familiar partners, having worked on at least three other projects in Singapore before this fresh digital bank foray in the Republic.

Singapore-based global trading platform Commodities Intelligence Centre is a joint venture between Zall, GeTS and the Singapore Exchange.

Zall and Marubeni have also jointly set up an online trade finance firm here known as ZMA Smart Capital, while Zall and GeTS are collaborating on blockchain solutions development through Zall Chain Technology.

Zall told BT the consortium members have also fostered other partnerships in industries such as insurance, transportation and logistics.

The Monetary Authority of Singapore said in January that 14 applications for the digital wholesale bank licences have been received. Several of those reported thus far have involved Chinese companies.

Jack Ma's Ant Financial has put in an application, while Singapore's iFast Corporation has made a bid by forming a consortium with two Chinese partners - Yillion Group and Hande Group.

Xiaomi Finance, a subsidiary of Chinese tech giant Xiaomi Corporation, is in a consortium with Hong Kong-listed AMTD Group, peer-to-peer lending platform Funding Societies and Singapore utilities provider SP Group.

There are up to five digital banking licences - up to two for full banking that will include retail and up to three limited for wholesale banking - up for grabs in Singapore. Results are likely to be announced in mid-2020.

The digital wholesale bank licences will allow successful applicants to serve SMEs and other non-retail segments. The licences require capital of S$100 million and allow foreign entities to take a majority stake.

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