Singapore cuts seven applicants in digital bank licensing bid

Monetary Authority of Singapore have shortlisted 14 out of 21 applicants vying for a digital bank licence in the country, but does not reveal which bidders have been dropped from the list.

The Monetary Authority of Singapore (MAS) has dropped seven applicants that had submitted bids for a digital bank licence in the country. This means 14 other applicants will move forward to the next phase of its evaluation process, with the winning bidders expected to be unveiled by year-end.

The industry regulator, however, did not reveal which bidders had been dropped or had moved ahead in its evaluation. 

The 14 applicants deemed to have met the eligibility criteria required for consideration comprised five digital full bank applicants and nine digital wholesale bank applicants, said MAS in a statement Thursday. They now would move on to the next stage of assessment, it added.

Singapore digital banking era will put focus on SMBs, consumer trust

Introduction of digital banks will 'shake up' Singapore's banking industry, which is expected to have up to five new digital market entrants, says a Forrester analyst, who underscores a need to build consumer trust and for small businesses to be better served.

Read More

This meant that two previous bidders for a digital full bank licence as well as five applicants of a digital wholesale bank licence had been dropped.

Amongst the list of eligibility criteria were the applicant's ability to demonstrate its proposed business model was sustainable, and that it could meet the minimum paid-up capital requirement at the onset as well as minimum capital funds requirement on an ongoing basis.

MAS in January said it received 21 applications for the country's digital bank licences. Organisations that had publicly announced their bids included a consortium led by local wellness and lifestyle brand V3 Group and contactless card company EZ-Link, games hardware maker Razer, and internet company Sea, which owns e-commerce company Shopee.

In the next stage of assessment, the remaining 14 applicants would have to present their proposals via virtual meetings, according to MAS. These would be further shortlisted based on their value proposition and business model, incorporating the innovative use of technology, and their ability to manage a prudent and sustainable digital banking business. They also should demonstrate growth prospects and other contributions to Singapore's financial centre, it said. 

It also called for the applicants to review their business plans as the COVID-19 outbreak would have impacted macroeconomic and business conditions. Noting that applications were submitted end-2019, before the pandemic surfaced, it noted that applicants should reassess their business assumptions that underpinned their financial projections, including funding sources. 

According to MAS, it expected to be on schedule to determine the winning bids by end of this year. 

The government agency in April delayed its decision to announce the list of successful bidders, originally slated to be revealed this month, due to the coronavirus outbreak. In June 2019, it revealed plans to issue up to five digital bank licenses as part of efforts to add market diversity and boost the banking system in Singapore. This meant that non-bank organisations would be able to apply for a license and offer digital banking services. 

RELATED COVERAGE