Ant Financial — the fintech arm of China’s e-commerce behemoth Alibaba and among the leading investors in Indian unicorns such as Zomato, Paytm etc., has applied for a digital banking licence in Singapore in order to promote “financial inclusion globally,” the company reportedly said in a statement. Ant Financial has applied to the Monetary Authority of Singapore (MAS) for a wholesale banking licence, according to the company. “We look forward to contributing to the development of the digital banking landscape in Singapore,” it added. Apart from Ant Financial, other companies jumping into the digital banking fray are gaming company Razer and cab-hailing platform Grab. According to media reports, both have applied for digital banking licenses.
In June last year, MAS had announced it will issue five digital banking licenses marking the “next chapter in Singapore’s banking liberalisation journey,” MAS said in a statement. “With innovative business models and strong digital capabilities, these players can cater to under-served segments of the market,” it said. Overall, the five new licenses will include up to digital full bank licenses requiring a capital of $1.5 billion and up to three digital wholesale bank licenses requiring a capital of $100 million.
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Southeast Asia’s digital financial services will be worth around $38 billion in annual revenue by 2025 with lending making up about half of it, according to Bain & Company. It this turns out to be true, digital financial services could grow to $60 billion in revenues and contribute 17 per cent of the financial services industry’s total revenues.
Ant Financial is looking to secure around $1 billion for a new fund to invest more in growing markets including India and Southeast Asia, DealStreetAsia had reported in November last year. The Chinese startup ecosystem for the past few years has attracted millions of dollars and caught the world’s attention with the frantic deal-making activity. However, the pace went down in almost last 12 months with funding level dropping from around $45 billion in Q2 2018 to around $6 billion in Q2 2019, according to KPMG Venture Pulse Q2 2019 report.