SINGAPORE: Singapore's central bank is studying whether to allow financial technology firms to operate digital-only banks in the city-state, it said, following moves by regulators in other Asian markets to issue virtual banking licences.
Singapore is among several financial centres in the region, such as Hong Kong, Seoul and Tokyo, pushing to become a fintech hotspot. 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 said in response to a query from Reuters on Tuesday (May 7).
"MAS is studying whether to admit such digital-only banks with non-bank parentage."
The central bank 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 Limited. 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.
Singapore, a major global financial services hub, is home to three locally listed banks - DBS Group Holdings Ltd, Oversea-Chinese Banking Corp Ltd and United Overseas Bank Ltd.
More than 200 banks have a presence in Singapore and a growing number have their operational headquarters in the city-state to service their regional group activities.