Singaporean regulators have proposed rules that would make it easier for banks to conduct or invest in nonfinancial businesses such as e-commerce and digital-payment platforms, helping them to better compete with non-bank firms in these areas, Singaporean Minister of Finance Heng Swee Keat (王瑞傑) said on Tuesday.
According to the proposals, lenders would no longer need regulatory approval to invest in such businesses, Heng told a bankers’ dinner.
The Monetary Authority of Singapore (MAS) is to cap the investment at 10 percent of a bank’s capital funds, the regulator said in a statement accompanying Heng’s speech.
“Banks are facing increasing competition from online and nonfinancial players that have leveraged their large user base to provide digital wallets, payments and remittance services,” Heng said.
How the city-state navigates the urgency for innovation, while maintaining the safety and soundness of its financial sector “will be crucial to our future,” he said.
The proposal came as financial technology and e-commerce giants including Alibaba Group Holding Ltd (阿里巴巴) are expanding financial services, including digital payments in Southeast Asia, as part of their global strategy.
Such companies “are in effect no different from banks,” DBS Group Holdings Ltd chief executive officer Piyush Gupta said at the same event.
“The logic is compelling,” Gupta said. “With the ubiquity of the smartphone, customers increasingly want banking to be seamlessly integrated into their daily lives. There are a number of areas where a banking service can be nicely integrated into e-commerce and we welcome the opportunity to do so.”
As part of the banking industry’s drive for digital payments, consumers at seven major Singaporean banks are to be able to transfer Singapore dollars to one another almost immediately using mobile phone numbers and national identification numbers, and without knowing recipients’ account details, the Association of Banks in Singapore said.
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