Grab and Singtel will bid for a digital-banking licence in Singapore

IN 2014 SINGTEL, a Singaporean telecoms group, teamed up with Standard Chartered, an Asia-focused bank, to create Dash, a mobile-money unit it claimed would “revolutionise mobile commerce and banking”. But red tape meant it went nowhere fast. It refocused on mobile payments, but still struggled. Insiders liked to quip, says one, that “the only place that accepted Dash was Singtel’s canteen”.

Singtel’s banking ambitions are no longer a joke. On December 30th it said it was tying up with Grab, a car-hailing firm, to bid for a digital-banking licence from the Monetary Authority of Singapore (MAS). Together, the two firms are well-placed to benefit from one of the city state’s biggest financial reforms in two decades—and perhaps, to shake up banking across South-East Asia, a market of 655m.

Singapore hopes the new licences will deepen banking penetration and boost competition. According to Arthur Lang of Singtel, though the city state is one of the world’s main financial centres, 40% of the population is either underbanked—lacking access to credit cards or long-term savings products—or unbanked—lacking even a basic account. The three biggest incumbents, DBS, OCBC and UOB, hold 61% of domestic deposits. A spokeswoman for MAS says the entry of non-banks will “add diversity and choice”. Tech firms should have access to better...



via The Economist: Finance and economics Business Feeds

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