Ant Group, Grab Holdings Ltd, Sea Ltd, and Financial Holdings Group Co., won licenses to run digital banks in Singapore, according to Bloomberg. The licenses pave the way for the technology giants to expand their financial services in the Southeast Asian hub.
- The digital lending market is expected to quadruple in five years, and Singapore city is coveted as a rapidly growing wealth management center and a gateway to Southeast Asia
- Digital full banks will be allowed to take deposits and provide banking services to both retail and corporate customers
- Digital wholesale banks can only target small and medium-sized businesses and other non-consumer segments and are expected to start operating from early 2022
- Digital wholesale banks will be introduced as a pilot allowing the authorities to review whether to grant more licenses in the future.
- The license award eases Ant Group troubles back home after a series of regulatory clampdowns that derailed its initial public offering.
- Ant and the consortium are expected to target segments, including unsecured personal loans, small and medium-sized firms with limited financing access.
- Other countries in Southeast Asia, including Malaysia, are expected to follow suit as financial services continue on the path of digitalization and further liberalization.
- The license award allows Singapore to join the U.K. and Hong Kong in the list of countries opening up the banking system to purely digital entrants.
- The announcement comes days before the government kicks off the Singapore Fintech Festival, one of the year’s biggest state-sponsored conferences.
Sea Ltd. and Financial Holdings Group Co. stocks are currently gaining. SE: NYSE is up 6.03%.