Meeting this criterion for growth, on top of complying with MAS’s regulatory framework, will raise the barrier to entry for many aspiring digital banks. The irony is that regulatory obligations are never meant to deter, but rather to promote the overall growth and sustainability of the digital banking ecosystem by steering players in the right direction.
SINGAPORE (Oct 14): The rise of digital banks today is a sign of the times, and a promise of greater opportunities for banks that are ready to chart the brave new cyberworld. While digital transformation gives a sense of foreboding to many, it can offer convenience to digital-first customers and reach beyond national borders to serve new types of customers, including the unbanked. These benefits can also help level the playing field for many small and medium-sized enterprises that are looking to seize a competitive advantage over more established players.
Singapore aspires to be Southeast Asia’s financial hub and its plans to roll out digital banking are going at full throttle, with no signs of slowing down. Following the announcement made earlier this year on the issuance of five new digital bank licences, the Monetary Authority of Singapore (MAS) opened up the application process recently to traditional banks and non-bank players. To succeed in their bid, applicants must demonstrate “a path towards profitability”.
