Ant Group Co. and a venture led by Grab Holdings Ltd. won licenses to run digital banks in Singapore, paving the way for the technology giants to expand their financial services in the Southeast Asian hub.
Sea Ltd. is also among the four winners announced Friday by the Monetary Authority of Singapore after almost a year of deliberation. A consortium involving China’s Greenland Financial Holdings Group Co. is the other successful candidate.
Singapore joins the U.K. and Hong Kong in opening up its banking system to purely digital entrants, as it seeks to inject innovation and competition into a market dominated by traditional lenders. The permits are coveted given the city’s status as a rapidly growing wealth management center and a gateway to Southeast Asia, where the digital lending market is expected to quadruple in five years.
“Following a very competitive digital banking license process in Hong Kong recently, digital banks in Singapore will now be one of the first to capitalize on the booming Southeast Asia market,” said Mark Robinson, technology sector lead partner for Asia Pacific at Herbert Smith Freehills in Singapore. “Other countries in the region will follow suit, including Malaysia, as financial services continue on the path to further liberalization and greater digitization.”