Singtel has been pushing into areas such as mobile wallets and online gaming while Grab has expanded into food delivery and a range of financial services
Singapore Telecommunications Ltd (Singtel) is partnering with Southeast Asian ride-hailing firm Grab Holdings Inc to apply for a digital full banking licence in Singapore, the two companies said on Monday.
The pair in a joint statement said they will establish a consortium with Grab owning 60% and Singtel holding the remainder, with the aim of offering a variety of digital banking services.
The move comes as Singapore's biggest liberalisation of its banking sector in two decades seeks to enable online-only banks that can operate at lower costs and therefore offer different services than those of traditional lenders such as DBS Group Holdings Ltd and Oversea-Chinese Banking Corp Ltd.
Singtel, the region's largest telecom operator, and Grab are among the best-known names in Southeast Asia and both have been expanding outside their traditional businesses.
Singtel has been pushing into areas such as mobile wallets and online gaming, while Grab has expanded into food delivery and a range of financial services.
"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," Reuben Lai, senior managing director at Grab Financial Group, said in a statement.
The city-state's central bank is set to issue up to two digital full bank and three wholesale bank licences. Digital full banks can accept deposits from and offer services to both retail and non-retail customers but must be led by a Singapore-based company.
Wholesale banks will mostly serve small and mid-sized enterprises.