The Monetary Authority of Singapore (MAS), has provided an update today in regard to the assessment process of digital bank license applications.
Giving 14/21 Applicants Initial Approval
According to the MAS, 14 out of 21 applications for digital bank licenses, met the criteria required to be eligible for consideration, which stands at approximately 66.67%. These applicants deemed suitable, which consisted of nine digital wholesale bank (DWB) applications and five digital full bank (DFB) applications, will now proceed to the next stage of the assessment process.
It was back in January this year when the MAS went public in regards to receiving 21 different applications for digital bank licenses. Of this, fourteen of the applications were for DWB licenses, with seven being for DFB licenses. It seems that the MAS had finished reviewing all the applications it had received, measuring them up to the eligibility criteria they had announced back in August of 2019
In-Depth Assessment Post-COVID-19
With the next stage of assessment, MAS will proceed to invite the 14 remaining eligible applicants to present their proposals by way of virtual meetings. From there, three major factors will determine whether or not they will be shortlisted. They will be judged on their ability to manage a sustainable, prudent digital banking business.
Furthermore, they will value the proposition, as well as the business model, and will judge their innovative use of technology and their incorporation of it. Lastly, they will evaluate the business prospects, as well as their other contributions to the financial center of Singapore.
The COVID-19 pandemic has severely damaged the macroeconomic and business conditions of the world at large, and this is especially so for the application process for the MAS, which started before the pandemic in 2019. As such, the MAS has begun to request its eligible applicants to review their respective business plans and assumptions underpinning their various financial projections.
This includes the sources of funding they expected, and the MAS expects them to send an independent review of these assumptions, as well. The MAS made it clear, however, that this delay needed for updated financial projections and business plans is not expected to affect the overall timeline for the regulator to award the digital bank licenses. These are scheduled to occur at the end of 2020
Striving For Continued Dominance
These new digital banking licenses will further be extended to non-bank players, as well. The license aims to help ensure that the Singapore banking sector remains robust and competitive in these innovative times. DFBs will be allowed to take deposits and provide a large array of financial services to both retail and non-retail customer segments. DWBs, in turn, will be permitted to serve non-retail segments, such as SMEs.