MAS mulls allowing digital-only banks
Regulators in other Asian markets start issuing virtual banking licences
Singapore's central bank said it is studying whether to allow financial technology companies to operate digital-only banks, as regulators in other Asian markets begin issuing virtual banking licences.
Singapore is among several financial centres in the region, such as Hong Kong, Seoul and Tokyo, pushing to become a fintech hot spot.
Measures in recent years include state funding, light-touch regulation and moves to allow start-ups to test financial products in a controlled environment.
"Technology and other non-bank firms have been making large digital strides, and they have brought substantive value to their customers in doing so.
"Some of these non-bank firms have established digital-only banks, either amongst themselves or in partnership with incumbent banks," the Monetary Authority of Singapore (MAS) said yesterday.
"MAS is studying whether to admit such digital-only banks with non-bank parentage."
Singapore is home to three locally listed banks - DBS Group Holdings, OCBC Bank and United Overseas Bank.
More than 200 banks have a presence in Singapore, and a growing number have their operational headquarters in the city to service their regional group activities.
OCBC Group chief executive Samuel Tsien cautioned against a one-size-fits-all approach by fintechs.
"With the rapid evolution of fintech over the past several years - where fintechs began as start-ups looking to disrupt financial institutions, to fintechs as eco-systems orchestrated by large technology companies - it is unavoidable that you will see digital-only banks without bank parentage wanting to operate here," Mr Tsien said in a statement.
"However, the operating model of such banks cannot be a one-size-fits-all regardless of the operating environment," he said, highlighting Singapore's small domestic market.
Mr Tsien also added that almost every Singapore resident has access to banking services.
STAKEHOLDERS
MAS said it has engaged relevant stakeholders to determine the value they bring to the local banking landscape and "understand how potential risks will be managed and contained".
Hong Kong's banking regulator this year issued so-called virtual banking licences to four companies including fintech firm WeLab Digital.
In South Korea, authorities have issued two online-only bank licences, one of them to Kakao Bank in 2017, which is operated by the company behind the country's largest chat app. - REUTERS
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