Incumbent banks must leverage tech - or be disrupted

Published Thu, Sep 5, 2019 · 09:50 PM

LAST week, the Monetary Authority of Singapore (MAS) announced it will accept applications for digital bank licences till this year-end. These licences are open to banks as well as non-banking companies. However, firms that apply would need to conform to criteria that include minimum capital requirements; they will also be asked to comply with the same regulatory regime as incumbent banks.

The MAS will issue up to two licences for digital full banks (DFB) and three for digital wholesale banks (DWB). What's the difference? DFBs can accept deposits and provide banking services to retail and non-retail customer segments. DWBs can accept deposits and provide banking services to SMEs and other non-retail customer segments.

This means that, for the first time in Singapore, non-banks will be able to accept deposits - and provide financial services - to retail customers. Companies that have signalled interest include Razer, Grab, Liquid Group, MatchMove Pay, OCBC and Singtel. Virtual banking will finally take off in Singapore by mid-2021.