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Finance

Ant Financial and Razer join race for Singapore digital bank license

Alibaba's affiliate, gaming hardware maker to vie with Grab-Singtel alliance

Ant Financial, which operates Alipay, China's largest mobile and online payments platform, already owns stakes in several companies outside China, including Paytm in India.   © Reuters

SINGAPORE (Nikkei Markets) -- Alibaba Group Holding's Ant Financial and gaming hardware maker Razer have joined the race for a digital banking license in Singapore as the city-state prepares to open up its banking sector to greater competition.

Ant Financial has applied for a wholesale license that will restrict it to serving corporate customers.

Razer, meanwhile, has bid for a "full digital bank" license as part of a consortium, a move that will allow it to provide a wide range of services to retail customers and expand its financial technology business.

Singapore said in August that it will offer up to five digital banking licenses to ensure its banking sector continues to be resilient and competitive.

Hong Kong, Asia's other major financial center, has already opened up its banking sector to digital ventures, with units of Ant Financial and Tencent Holdings among the parties that have obtained licenses.

Ant Financial would have required a Singapore partner had it opted to bid for one of the two full digital bank licenses. The Monetary Authority of Singapore has said it will only consider applicants controlled by Singaporeans and headquartered in Singapore.

The three wholesale licenses are open to foreigners and will be given to companies planning to serve small and medium-sized enterprises and other non-retail segments.

Ant Financial, which operates Alipay, China's largest mobile and online payments platform, already owns stakes in several companies outside China, including Paytm in India. It also manages the world's largest money-market fund.

"We look forward to contributing to the development of the digital banking landscape in Singapore," the company said in an emailed statement.

Razer, founded by Singaporean entrepreneur Min-Liang Tan and Robert Krakoff in 2005, is headquartered in California and Singapore and listed in Hong Kong. Razer Fintech, its financial arm, was established in April 2018 and counts Lim Siong Guan, the ex-president of Singapore sovereign wealth fund GIC and a former head of the civil service, as an advisory board member.

Razer, which operates an online payments platform, said its financial technology unit would establish Razer Youth Bank to meet the needs of "underserved youth and the millennials segment of Singapore" through the innovative use of technology.

Razer plans to take a 60% in the bank. The entities that will hold the remaining 40% include Hong Kong insurance giant FWD, controlled by billionaire Richard Li, Singapore's Sheng Siong Holdings, owned by the founders of the supermarket chain of the same name, and Carro, an online car marketplace, which claims to be the largest in Southeast Asia.

Just before applications for the licenses closed Tuesday, ride-hailing giant Grab and Singapore Telecommunications teamed up to submit a bid for a full digital bank license.

The Singapore banking scene has long been dominated by three major groups - DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank.

All three offer digital services to varying degrees and serve both retail and corporate customers. Nevertheless, the entry of digital-only banks could spur better products and services, say observers.

The MAS expects to announce the successful bidders by mid-year.

--Kevin Lim

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