Digital Bank Licensing in Singapore: The Real Score

Digital Bank Licensing in Singapore The Real Score

Image: joyfull /

The profile of applicants vying to be Singapore’s first digital bank are a veritable list of who’s who in the world of business and global commerce. Notwithstanding the fact that many of them are relatively new in the financial services business, these companies might just end up bringing the most transformative change in banking and finance sector in Singapore.

As of 31 December 2019, the Monetary Authority of Singapore (MAS) has confirmed that it had received “21 applications for digital bank licences,” comprising 7 applications for the digital full bank (DFB) licences, and 14 applications for the digital wholesale bank (DWB) licences.

MAS further added that, “the new digital bank licences have attracted strong interest from a diverse group of applicants. These include e-commerce firms, technology and telecommunications companies, FinTechs (such as crowd-funding platforms and payment services providers) and financial institutions. The majority of applicants are consortiums, with entities seeking to combine their individual strengths to enhance the digital bank’s value proposition.”

The number of applicants seems quite high considering the strict eligibility criteria that MAS has laid out for applicants of digital bank license in Singapore, which includes the ability to “meet the applicable minimum paid-up capital requirement at the onset and the minimum capital funds requirement on an ongoing basis.”

For Digital Full Bank (DFB) applicants, this includes a commitment of funds or “concrete fundraising plans to meet the minimum paid-up capital of S$1.5 billion that is required when the DFB becomes a full functioning DFB,” according to MAS website.


While all these latest developments seem to be exciting and all brand new, Singapore’s local banking sector are already in the thick of the digital banking game for quite some time. Currently, there are four local banks and nine qualifying full banks in Singapore providing full range of banking services. Additionally, there are 99 licensed wholesale banking entities in Singapore.

Taking advantage of Singapore’s high internet and mobile subscription penetration rates, standing at 91% and 154% of the population respectively, local banks have launched and continue to improve their online banking and mobile apps strategy. As a result, Singaporeans are ditching bank visits and opting to go mobile instead.

According to a study, mobile banking usage has overtaken branch visits by 15%. In addition, customers who expressed openness to digital banking, 66% said they will remain with their current bank even if all of its physical branches were closed while only 52% indicated they would do so with an entity outside of the banking sector, perhaps an indication that existing local banks are making headway in their quest to go digital.

Of course, behaviours could change. And with the amount of resources that would-be digital banks are willing to put in, there is no telling where we could end up with 3 to 5 years from now. After all, digital banking is more than just an internet or a mobile version of banking services. It goes far deeper than that in that it is underpinned by the unprecedented utilisation of customers’ data, making the relationship between a digital bank and its customers more intimate and highly personal.

“By having access to data, which traditional banks do not have today, digital banks could come up with unique products and services.”

In fact, according to some reports, it is not impossible that one day, you may be able to pay for your annual holiday vacation by instalments or perhaps buy an insurance for a movie ticket. These types of financial services could come as a result of partnership of multiple entities with different core strengths, vying to present a compelling USP to its customers.

“By having access to data, which traditional banks do not have today, digital banks could come up with unique products and services that may be unconventional, but could prove to be wildly popular for customers,” says Nirav Patel, Managing Director of The Digital Banker, a globally trusted news, business intelligence and research partner to the worldwide financial services sector.


This article is the first part of a four-part series that takes a closer look at the landscape of Digital Bank Licensing in Singapore. Here are the links the complete series:

Part 1: The Real Score

Part 2: The Contenders

Part 3: The Incumbents

Part 4: 2020 and Beyond


Image: joyfull /

scroll to top