Billionaire Jack Ma’s (馬雲) Ant Group Co (螞蟻集團) launched its digital bank in Singapore, as China’s largest online financial platform branches out of its home market amid regulatory headwinds.
Anext Bank Pte Ltd is to provide digital financial services to micro, small and medium-sized enterprises, particularly those with cross-border operations, it said in a statement yesterday.
The financial technology giant is entering an arena dominated by traditional incumbents including DBS Group Holdings Ltd (星展銀行) and Oversea-Chinese Banking Corp (華僑銀行). Using Singapore as a base for its business in Southeast Asia could offset slower growth prospects at home after government-ordered regulatory overhauls.
Part-owned by Alibaba Group Holding Ltd (阿里巴巴), Ant could benefit from the e-commerce operator’s unit in the region, Lazada.
“Banking services are essentially a very central part of the holistic suite of financial services that we’re doing within Southeast Asia, and hopefully using Singapore as a launchpad,” Anext Bank CEO Toh Su Mei (卓淑美) said at a news briefing.
Asked about staffing, Toh said the wholly owned bank plans to build a “Singapore-first team,” with 75 percent of workers based in the city-state and the rest in China.
Toh, a former executive at DBS, has more than 20 years of experience in the banking industry. She led DBS’s lending arm for small and medium-sized enterprises in the region before joining Ant, according to her LinkedIn profile.
The digital bank plans to offer a preview of its dual-currency deposit account, which includes three-factor authentication verification, remote on-boarding and daily interest, it said.
Accounts are to be made available from the third quarter.
Toh said the bank can offer interest rates that are in line with the market.
“We are not here to create a price war,” she said.
Ant was one of two groups to get a wholesale digital banking license in December 2020, allowing it to serve small and medium-sized firms and other non-retail segments. It requires a capital commitment of S$100 million (US$72.77 million).
That compares with a full digital bank license, which can serve all kinds of customers and eventually requires S$1.5 billion in capital as well as local control.
Ant is also partnering with Proxtera, a local entity that is part of a public initiative led by the Monetary Authority of Singapore (MAS) and the Singaporean Infocomm Media Development Authority, to create an open framework for collaboration with financial institutions.
Singapore’s efforts to open up the banking industry to technology companies come on the heels of a similar move in Hong Kong, where Ant and Chinese competitors, such as Tencent Holdings Ltd (騰訊), obtained licenses in 2020.
“Continuous innovation and new capabilities that digital banks are slated to bring will no doubt add more engines of growth to Singapore’s financial sector,” MAS chief financial technology officer Sopnendu Mohanty said in the statement.
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