A consortium, which includes Fintech firm Razer and the founders of Sheng Siong, has reportedly filed an application for obtaining a digital full-bank license in Singapore. The application notes that the consortium wants to mainly focus on the “underserved youth and millennials segment.”
Insurance business FWD, internet firm LinkSure Global, Insignia Ventures Partners, a Singapore-based tech venture fund, and Carro, an automobile wholesale marketplace, are also part of the consortium. The Lim brothers, who established Sheng Siong, a supermarket chain, will also be participating, through their private vehicle, known as Sheng Siong Holdings. Sheng Siong Group, the mainboard-listed organization, will not take part in the bid.
Fintech firm Razer will reportedly acquire a 60% share in the consortium, and the remaining stake will be held by several other partners.
Razer Fintech, the firm’s financial technology division, intends to further expand its Fintech-focused offerings to include online banking products and services by creating a globally accessible youth bank, called the Razer Youth Bank.
To add lifestyle experiences to its online banking solution, Razer Fintech has begun working with various service providers, which include JustCo, an established co-working space provider, SkyScanner, a travel company, and payments giant Visa.
Razer Youth Bank is planning to provide products and services to new business owners and small and micro enterprises that are experiencing challenges while trying to access funds to support their growth and digital transformation efforts.
The youth bank also intends to support financial literacy initiatives among the younger generation, provide fair and more accessible product offerings, and offer a more intuitive and engaging digital banking experience. Razer Youth Bank will be based in Singapore, and its management plans to expand operations globally.
The Monetary Authority of Singapore (MAS) will be issuing up to five digital banking licenses, which include two full-bank licenses that allow companies to engage in retail banking operations, and three licenses for wholesale banking. The MAS will be announcing the awards of the digital banking licenses at some point in mid-2020.
Razer noted that, in December 2019, it began holding discussions with “prospective partners” about obtaining a full-bank license, however, the time frame to submit the application was “tight.” The final date for turning in digital banking applications in Singapore was December 31.
Grab Holdings and local telecom giant Singtel have also applied for a full-bank digital license. Grab will reportedly have a 60% share in the consortium, and Singtel will hold a 40% stake.
Another established consortium, which includes OCBC, Validus Capital, Keppel Corporation and Vertex Ventures, has decided that it won’t be applying for a digital wholesale banking license. The change in plans has reportedly come after Keppel’s review of its core business strategy, which involves Temasek Holdings taking over control of the conglomerate through a partial offer.
Razer Fintech’s legal and financial obligations for setting up the Razer Youth Bank are subject to approval by the MAS, successful completion of various consortium arrangements, and compliance with appropriate regulatory guidelines.