On June 6 Chinese billionaire Jack Ma’s Ant Group, the financial technology giant declared that it will launch a digital wholesale bank consolidated in Singapore.

ANEXT Bank will offer digital financial services to micro, small and medium-sized enterprises that have cross-border operations, it said in a statement on Monday. Ant will permit these organizations to open an account from the third quarter of this current year. The move denotes the Hangzhou-based organization proceeded with expansion abroad.

"This marks yet another milestone in Singapore's digital bank development journey, a strategic effort to ensure the banking sector remains progressive, globally competitive, and vibrant," said the Monetary Authority of Singapore (MAS) Chief Fintech Officer Sopnendu Mohanty.

The fintech giant is entering a field overwhelmed by traditional incumbents including DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. Involving Singapore as a base for its business in Southeast Asia might counterbalance slower development possibilities at home after government-requested regulatory upgrades. A former executive at DBS, Toh Su Mei will take the reins of Ant’s digital bank, the company said.

“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,” Mohanty said in the statement.

Ant, part-claimed by Alibaba Group Holding Ltd., which likewise possesses the Post, can also profit from the online business operator’s unit in Southeast Asia, Lazada.

Ant’s digital bank, which got approval from the national bank to begin operations on June 2, is starting by offering a preview of its dual-currency deposit account, which incorporates features including a three-factor authentication check, remote onboarding, and daily interest, it said.

Ant in partnership with Proxtera, a local entity that is part of a public initiative led by MAS and Singapore’s Infocomm Media Development Authority, will create an open framework for collaboration with financial organizations.

Singapore’s efforts to open up the banking industry to technology companies come closely following a comparative move in Hong Kong, where Ant and Chinese competitors including Tencent Holdings Ltd. gotten licenses in 2020.

Ant Group isn’t the only fintech firm trying to give digital banking services in Singapore. Last week, Green Link Digital Bank, which is possessed by a consortium that incorporates Chinese developer Greenland Holdings and Linklogis Hong Kong, commenced business in the country.

Joyashree Dey

CBW - External Analyst

INDIA