The Monetary Authority of Singapore (MAS) has seen 21 different entities apply for a digital-only bank license. MAS had set a deadline for applications of December 31, 2019.
MAS is offering just 5 different digital bank licenses. These licenses include two digital full bank (DFB) licenses and three digital wholesale bank (DWB) licenses. DFBs will be allowed to accept retail deposits, while DWBs will target SMEs and other non-retail segments.
MAS states that this is a “significant initiative” that seeks to encourage non-bank players with innovative business models to enter the banking industry.
According to MAS, 7 entities applied for the DFB licenses and 14 applications for the DWB licenses. MAS shared that applicants included a diverse group of firms including crowdfunding platforms, payment platforms, e-commerce firms, tech, and telco companies. MAS said the majority of applicants are consortiums, with “entities seeking to combine their individual strengths to enhance the digital bank’s value proposition.” The aspiring Fintechs will challenge traditional banks for market share of the fast-growing digital bank sector.
MAS reported that it will evaluate all eligible applications based on their value propositions including the use of technology to serve customer needs, their ability to manage a prudent and sustainable digital banking business, and their contributions to Singapore’s financial center.
Approved Fintechs are expected to commence digital banking services by mid-2021.