“We look forward to contributing to the development of the digital banking landscape in Singapore.” That was the entire comment Ant Financial emailed after confirming it had applied for a digital banking licence from the Monetary Authority of Singapore.
Ant, founded by billionaire Jack Ma and described as China’s largest online financial platform, filed for a wholesale licence. That category would let it serve corporate clients. Bloomberg reported the application on Thursday, 2 January 2020.
Two rivals already in the race
Ant is not alone. Razer, the gaming company, said on Wednesday that it had applied for a full bank licence with a group that includes other Singapore-based firms. Earlier in the week, ride-hailing giant Grab said it was bidding for a full licence in partnership with telecom operator Singapore Telecommunications. The deadline for all bids was Tuesday.
The authority has up to five permits to give out to non-banks. Two are for full digital banks, which can serve any kind of customer, must stay under local control and need S$1.5 billion in capital. The other three are wholesale licences, the kind Ant wants, where foreign firms may hold majority stakes and the capital commitment is S$100 million.
The licences were announced in June 2019. At the time, MAS chairman Tharman Shanmugaratnam said they would “ensure that Singapore’s banking sector continues to be resilient, competitive and vibrant.”
Why Ant wants in
A win would put Ant up against established banks such as DBS Group Holdings and Oversea-Chinese Banking Corp. in a market that is growing quickly. A report by Bain & Co, Google and Temasek Holdings expects South-east Asia’s digital lending market to more than quadruple to US$110 billion by 2025.
The move follows Hong Kong, where Ant and Chinese competitors including Tencent Holdings were granted licences earlier in 2019. Ant’s payments app Alipay and its local e-wallet partners had about 900 million annual active users in China and 1.2 billion globally as of June, Bloomberg Intelligence estimated.
Outside the mainland, Ant has been building up. It is running a blockchain project for cross-border remittances between Hong Kong and the Philippines, and it has put money into at least eight digital wallet operators abroad, among them Paytm in India and Dana in Indonesia.
