The “real prize” for Singapore’s upcoming five challenger digital banks is the Asean market, where half of the population is underbanked and incumbent banks are still catching up. Digital banking offerings developed and tested in Singapore will have a competitive advantage in regional economies, on the back of the city-state’s regulatory, capital and technology ecosystem.
Digital banking offerings developed and tested in Singapore will have a competitive advantage in regional economies, on the back of the city-state’s regulatory, capital and technology ecosystem, said analyst Thilan Wickramasinghe.
In the report, he noted that banking penetration in Asean remains low while incomes have been growing rapidly. Banking systems in most Asean countries are also still catching up in terms of regulatory best practices, even as the younger demographics are increasingly using digital payments for transactions.
“These provide a strong opportunity for disruption from challenger digital banks in these markets, in our view,” he wrote.
The Monetary Authority of Singapore (MAS) had earlier announced in end-June that it will issue up to five new licences to digital banks and begin taking applications from August, in one of the biggest liberalisation steps taken by the city-state in years.
The five new digital-bank licences will comprise up to two digital full-bank licences, and up to three digital wholesale bank licences.
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22 July 2019