Singtel Telecommunications Ltd. and the Southeast Asian unicorn, Grab, are partnering to apply for a digital full banking license. In a joint statement, the two companies have said that they will be setting up a consortium in which Grab will own 60% and Singtel will hold the remainder.
The consortium is being set up by the two companies with the aim of offering digital banking services. It will concentrate on targeting digital-first users and small and medium-sized businesses that often struggle to access credit.
Grab’s partnership with the region’s largest telecom operator will help with its efforts towards expanding outside its traditional business.
Reuben Lai, senior managing director at Grab Financial Group said in a statement: “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.”
The move is a significant one from Singtel too as it is moving beyond traditional mobile carrier services. The company has been showing intent in the digital payments segment with Dash mobile wallet.
Monetary Authority of Singapore (MAS) said in June that it will be issuing digital bank licenses to five applicants. This will include two digital full bank licenses. This is a great opportunity for non-banking companies like Grab to get into banking.