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Singapore is opening up its banking industry to digital lenders in a reform that could shake up the sector across Southeast Asia, with Chinese billionaire Jack Ma and ride-hailer Grab among those seeking licences.
Traditional banks are being challenged by a new generation of online-only competitors that can offer better savings and borrowing rates, as they don’t need to spend money on overheads such as physical branches.
The introduction of digital lenders into the Singaporean market heralds the biggest liberalisation of the financial hub’s banking sector for two decades and follows similar moves in the United States (US), Britain, Japan and Hong Kong, among others.
With most adults in the city already having access to financial services, firms awarded licences are likely to use the city-state as a gateway to the wider region, where many consumers still lack bank accounts.
“It’s a total reconfiguration of the terrain – we’re talking about radical changes,” Lawrence Loh, a professor at the National University of Singapore Business School, told AFP.
“Singapore is the launchpad for Southeast Asia.”
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