5 Digital Banks To Be Given MAS Licenses: What Does This Mean For You & Me?

MoneySmartBy Ali R.

digital banks singapore


  • Disney sold its stake in the YES Network to an investor group that includes Amazon, the company announced Thursday. 
  • The total enterprise value of the stake is $3.47 billion, according to the announcement. 
  • The Yankees and Sinclair Broadcast Group are also part of the investor group.

Talk is on the street that you can’t pay by cash anymore in China as everyone pays through their phones.


While it may be an exaggeration to say that China is completely cashless, digital banks have overturned the banking industry in China. Could that be our future, given that the Monetary Authority of Singapore (MAS) is loosening up the rules and issuing 5 digital bank licenses soon here? What else does digital banking mean for you and me?

RT: Jeff Bezos, Amazon 190619

What can digital banks do?

Digital banks, when fully licensed, should provide the same functions of a traditional bank but without the brick and mortar branches. Some virtual banks can tap on existing ATM networks, though.

They operate purely on digital platforms, so you can probably expect real-time updates, quicker account approval times, quick investing services and personalisation. These will be done using artificial intelligence and big data analysis.

Ideally, virtual banks should be faster, more efficient and operate at a much lower cost structure than traditional banks, since there is less expenditure on property rent and manpower.

According to an MAS spokesperson, digital banks will open up the below possibilities:

  • New digital banks could potentially offer deposit accounts without imposing any minimum deposit amount or fall-below fees, as seen in the United Kingdom and Hong Kong.
  • Digital banks with access to more wide-ranging data sources could adopt different credit risk assessment approaches to lend to under-served segments of the economy such as the young and micro enterprises.
  • Increased competition from digital banks is also likely to spur existing banks to improve further on their own digital offerings.

Timothy Chen, CEO and co-founder of MaxFinx, a company that provides the infrastructure for digital banks, says, “Digital banking will speed up account opening, allow instant customer verification and personalisation of banking services at much lower costs.”

So, probably like how Circles Life spurred incumbent telcos to revamp their pricing, regular folks should be able to see some innovative financial products and hopefully higher interest rates on deposits. Fingers crossed!

Not so fast… Only a limited number of digital bank licenses will be issued for now

In Singapore, the MAS has announced in June 2019 that 2 digital full-bank licences and up to 3 digital wholesale bank licences will be issued. Applications will be open in August 2019.

“Restricted”? What can digital banks not do in the meantime?

According to an MAS spokesperson, “A Restricted Digital Full Bank will be subject to a deposit cap. The deposit cap will commence at S$50m (with a corresponding low paid-up capital of S$15m) and will be gradually lifted as the bank demonstrates its ability to manage its operations and risks in an adequate manner that is commensurate with the scale of its business.”

There will also be deposit caps from each individual customer and restricted digital full banks can only offer simple credit and investment products.

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