In a move that the Monetary Authority of Singapore (MAS) describes as new phase in the country's banking system, MAS announced it intends to issue up to five new bank licences to digital players. This will be in addition to any internet-only bank services offered by local banking groups.
The five new bank licences will comprise two digital full bank licences and three digital wholesale bank licences, and application (targeted for August 2019) will be open to players of non-bank parentage. In addition to their technology and e-commerce business, the successful applicants will be licensed to provide:
- savings accounts;
- loans; and
- simple credit and investment products.
To ensure this measure to liberalise Singapore’s banking sector does not negatively affect the country's long-term financial system stability, the following will be part of MAS's new digital bank regime:
- prudent baseline requirements on track record and sustainability of business models;
- safeguards to protect depositors, mitigate the risk of untested business models, and minimise costs to the financial system in the event of a failure; and
- business requirements for licensees to ensure a level playing field for both the new digital banks and the incumbents.