Singapore delays distribution of Digital Bank licenses; tech giants may need to wait longer to enter the financial industry.

The Singapore financial regulatory authority announced earlier this month that it will extend the review period for Digital Bank licenses. The results of applications, originally scheduled to be announced in June this year, will be postponed until the second half of the year. The regulatory agency stated that this decision aims to allow applicants to focus on addressing the current impact of the pandemic while also providing regulators with more time to ensure the stability of the financial system.

Earlier this year, regulators revealed that they received 21 applications for Digital Bank licenses. The original plan was to announce the list of successful applicants in June and allow these institutions to start operating by mid-next year. However, due to changes in the pandemic situation, this timeline had to be adjusted.

At the end of June last year, Singapore's financial regulatory authority announced a pilot program to issue 5 digital bank licenses, aimed at providing opportunities for non-traditional banking background enterprises to enter the local banking industry. These 5 licenses include 2 full digital bank licenses and 3 digital wholesale bank licenses targeting small and medium-sized enterprises and other non-retail sectors.

According to the list of applicants released at the beginning of the year, several well-known technology companies participated in this application. Among them, two Chinese internet giants applied for digital wholesale bank licenses. Reports suggest that one of the companies formed an alliance with multiple partners to jointly submit an application to the regulatory authorities. In addition, a gaming peripheral manufacturer and a leading technology company in Southeast Asia also applied for a full digital bank license and a digital wholesale bank license, respectively.

The delay in issuing licenses reflects the cautious attitude of regulatory authorities in the face of global crises, as well as their emphasis on maintaining the stability of the financial system. For technology companies hoping to expand financial services through Digital Bank operations, this is undoubtedly a process that requires patience. However, in the long run, this prudent approach may help ensure that new entrants can operate in a more stable environment, ultimately benefiting both the industry and consumers.