Many startups are paying close attention to what kind of model will Singapore's virtual banking licenses adopt?

Although MAS has not yet made a final decision on whether to introduce a virtual banking license mechanism, in addition to Grab, there are also many companies that are closely watching the relevant progress of the incident.

In early May 2019, the Monetary Authority of Singapore (hereinafter referred to as MAS) issued a statement saying that it is conducting research and discussion on whether to issue non-traditional banking licenses for financial technology companies.

Yesterday's news from Reuters showed that Singapore's famous shared travel platform and unicorn founder Grab expressed its intention to apply for MAS's virtual banking license, and may even hire a professional consulting company for relevant evaluation and preparation.

In 2018, Grab established its own financial technology company Grab Financial, which has been involved in mobile payment, cross-border remittance, insurance technology and other fields, and strives to build a one-stop super financial technology application platform, and plans to enter the banking field. It became very reasonable.

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Earlier reports said that MAS's consideration of issuing virtual banking licenses may have been inspired by the Hong Kong virtual banking license mechanism. However, many people in the industry pointed out that the virtual banking license requirements in Hong Kong are too strict, so it may not be a typical reference case.

Perhaps due to industry maturity and related financial risks, many countries that have introduced a virtual banking license mechanism have chosen the path of “restricting licenses first and guiding them to become bank institutions with unrestricted business licenses”.

For example, the Australian Prudential Regulation Authority (hereinafter referred to as ARPA) only issues “Restricted Authorised Deposit-taking Institutions” (Restricted ADI) licenses to virtual banks, allowing authorized institutions to operate as virtual banks. Years, and during this period, accumulate relevant resources and capabilities to prepare for a comprehensive banking license. At present, Australia's first Volt Bank, which has obtained a virtual banking license, has successfully upgraded to a virtual bank with an unrestricted banking license in accordance with ARPA's plan. The UK has taken similar steps, and the country’s first virtual bank to receive a full banking license has finally landed under the name of financial technology founder Monzo.

For Grab, applying for and obtaining a license may be more of a brand rebranding and regulatory compliance.

Although MAS has not yet made a final decision on whether to introduce a virtual banking license mechanism, in addition to Grab, there are also many companies that are closely monitoring the progress of the event, including Singapore Telecom Co., Ltd. (Singtel) and from the UK. Virtual Bank Revolut.

Translation / Gao Xu original / FINTECH NEWS

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