Following its earlier announcement on 28 June 2019, on 5 digital banking licences in Singapore up for grab, Monetary Authority of Singapore (MAS) had announced on 7 January 2020 that it had received 21 applications. This comprises 7 applications for Digital Full Bank (DFB) licences and 14 applications for Digital Wholesale Bank (DWB) licences.

MAS had set out the eligibility criteria as follow:

Eligibility Criteria

Applications for the DFB or DWB licence must meet the following requirements –

  1. At least one entity in the applicant group has three or more years of track record in operating an existing business in the technology or e-commerce field.
  2. Key persons are fit and proper.
  3. Demonstrates ability to meet the applicable minimum paid-up capital requirement at the onset and the minimum capital funds requirement on an ongoing basis.
  4. Provides clear value proposition, incorporating the innovative use of technology to serve customer needs and reach under-served segments of the Singapore market.
  5. Demonstrates that the proposed digital bank’s business model is sustainable.
  6. Submits a feasible plan that can facilitate the orderly exit of the proposed digital bank.
  7. Shareholders of the proposed digital bank commit to providing a letter of responsibility and a letter of undertaking that MAS may require in respect of the operations of the proposed digital bank. For DFB licences, MAS will only consider applicants who are anchored in Singapore, controlled by Singaporeans and headquartered in Singapore.

MAS further said that the licences had attracted strong interest from a diverse group of applicants, ranging from Tech companies to Financial Institutions. Originally touted to be announced in June 2020, the Covid 19 pandemic had forced MAS to push back the announcement to sometime in the 2H of 2020. Successful applicants are to commence the operation by mid 2021 as per original plan. MAS said that the issuance of the new digital bank licences, comprising up to two DFB licences and three DWB licences, is a significant initiative aimed at enabling non-bank players with strong value propositions and innovative digital business models to offer banking services. DFBs will be allowed to take retail deposits, while DWBs will focus on serving SMEs and other non-retail segments.

On 18 June 2020, MAS said that 14 out of the original 21 applications have met the eligibility criteria and these eligible applicants, comprising of 5 DFB applicants and  9 DWB applicants will progress to the next stage of assessment. In the next stage of assessment, MAS will invite the 14 eligible applicants to present their proposals via virtual meetings. The 14 eligible applicants will then have to be further assessed based on a set of criteria as follow:

Assessment Criteria

Applicants will then be assessed and shortlisted based on their:

  • Value proposition and business model, incorporating the innovative use of technology, to serve customer needs and reach under-served segments of the Singapore market that differentiates it from existing banks. MAS will also consider the ability of the applicant to implement the proposal
  • Ability to manage a prudent and sustainable digital banking business, including the level of understanding of key risks in a banking business, and strength of its regulatory compliance and risk management plans. MAS will also consider the reputation, track record, financial strength and commitment of the applicant’s shareholders.as well as
  • Growth prospects and other contributions to Singapore’s financial centre, such as the jobs it will be bringing to Singapore, its commitment to develop the skills of the local workforce, the capabilities (including technology) it will be locating in Singapore, the headquarter functions it will be anchoring here as well as its regional expansion plans.

As the COVID-19 pandemic has significantly impacted macroeconomic and business conditions since the applications were received at the end of 2019, MAS has asked all eligible applicants to review the business plans and assumptions underpinning their financial projections, including sources of funding, and provide an independent review of these assumptions.

MAS does not expect the request for updated business plans and financial projections to affect the timeline for award of the digital bank licences by the end of this year.

Based on information that is available, some of the selected contenders include the

  • BEYOND Consortium, comprising V3 Group, EZ-Link, Far East Organization, Singapore Business Federation (SBF), Mitsui Sumitomo Insurance Group (MSIG) and Heliconia Capital (Temasek linked company). This is confirmed by V3 Group and the consortium had appointed former Foreign Minister George Yeo to be their adviser on 23 August 2020. This consortium had bid for a FDB licence in Singapore.
  • AMTD-led Consortium, comprising Hong Kong’s AMTD Group, Xiaomi Finance, SP Group and Funding Societies. This consortium did not confirm nor deny, however they had appointed Prof Annie Khor on 25 June 2020 as new member of director of board, citing her expertise and experiences on ASEAN, GovTech and MAS. The consortium had also appointed Mr Osman Ershad Faiz as their CIOO (Chief Information and Operating Officer), drawing on his background on digitalisation, CIO and Head of Wholesale Banking at Standard Chartered Bank. This consortium had bid for a WDB license in Singapore. It is a strong indication that this consortium is one of the 9 DWB licence applicants

As MAS itself and the rest of the applicants had not yet released any statements, we could not determine with certainty which of them had failed or made it through the next stage.

escveritasASEANBanking & FinanceDigital Technologyasean,banking,digital,finance,FinTech,SingaporeFollowing its earlier announcement on 28 June 2019, on 5 digital banking licences in Singapore up for grab, Monetary Authority of Singapore (MAS) had announced on 7 January 2020 that it had received 21 applications. This comprises 7 applications for Digital Full Bank (DFB) licences and 14 applications for...