The Singapore government announced earlier this year that it would be granting licenses to new types of banks that can innovate and compete against large brands, such as DBS, POSB, OCBC or HSBC.
Despite this, the restrictions and application process has been reported to be tough, with rumours spreading that Singaporean brands were looking to join forces late last year.
According to the deal, Grab will own 60% of the business and Singtel a 40% stake, if the license is approved.
The key positioning of the new banking service is that it will be able to offer financial services products that fit into the apps and services that Singaporeans already use - either within the Grab app or Singtel’s telco, media and lifestyle products.
Reuben Lai, senior managing director, Grab Financial Group, said both brands are trusted by Singaporeans, which would factor into the growth of the bank, should it be approved.
“The core of Grab’s mission has always been to solve everyday challenges and unlock economic potential in Southeast Asia. In the past two years, we have launched and scaled financial services such as e-money, lending and insurance distribution into Southeast Asia’s largest fintech ecosystem. The natural next step is to build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable. We are excited to partner with Singtel, a well-respected brand in Singapore and the region, to provide a more bespoke service experience that will empower our users to save more, grow their wealth and transact seamlessly,” he said.
Arthur Lang, chief executive of Singtel’s International Group, spoke with The Drum late last year, explaining how the business was expanding its core service offerings from telco. The brand is looking at eSports and gaming, 5G and banking as new ways to reach customers.
Speaking as part of the announcement, he said: “Singtel has always been an enabler of change. We’re excited by the opportunity to move into the digital banking space, which is a natural extension of the mobile financial services that we are already offering to our large base of customers. Just as we’ve been building an ecosystem of digital services to improve the way customers live, work and play, we want to fundamentally change the way consumers and enterprises bank."
"Together with Grab, which has extensive digital expertise and experience in this region, we have a formidable set of assets and significant synergies to make banking more accessible and intuitive, and deliver much- needed product simplicity, speed and affordability.”
It is not yet known how long the application process will take before the new financial brand between the two businesses can be formed.