Is it a signal for Singapore lenders to shape up?
Recently, Singapore has decided to issue digital-banking licenses to non-banking companies (including foreign companies). With the lucrative business that comes with it, it is no wonder that this decision will attract great interest.
The government of Singapore, through the Monetary Authority of Singapore (MAS), will issue five new digital bank licenses to non-banks. The first two full bank licenses will allow non-banking firms to provide services that take deposits from retail customers. The remaining three licenses will be a wholesale bank license. Furthermore, these three licenses will allow firms to serve various non-retail segments and small-to-medium enterprises.
With these services that are now available for others to deliver, local banks (both big and small) will undoubtedly face competition. But it will be tougher for smaller banks to fight head to head with the new competitors.
The incumbents such as DBS Group, Oversea-Chinese Banking Corp, and United Overseas Bank already have technologies in place to protect their current positions from competitors.
In the case of fintechs or financial technology companies, they will take full advantage of technology to provide financial service to customers.
The new competition is taking shape as newcomers are preparing to enter Singapore’s banking highway.
InstaRem, a cross-border payments start-up, Razer, a gaming hardware manufacturer, and Southeast Asia’s top start-up, Grab, are some of the companies planning or preparing for entry.
On the other hand, this competition will create an advantage for people: improved and innovative services.
As everyone is trying to take a slice from the pie, firms would try to outdo each other’s services. The following developments in Singapore’s banking sector are exciting.
In this developing trend, the question is, who would triumph in the end?
Also read: Leading Blockchain Projects and Startups in Singapore
