Chinese billionaire Jack Ma’s Ant Group announced Monday the soft launch its Singapore-based digital bank, ANEXT Bank. This marks its latest attempt to expand its digital banking reach beyond its home market. The new entity will provide account services for small and medium businesses starting in Q3 2022.
Helping small businesses by leveraging Ant’s Footprint
Ant Group is China’s largest digital payments platform Alipay. It has strong user base from merchants who run small businesses on the country’s dominant e-commerce platform Alibaba. According to ANEXT’s press release, the newly established digital bank will also be focusing on such businesses.
“The digital bank based in Singapore will provide digital financial services to micro, small, and medium enterprises [SMEs] within the local and regional areas. This includes cross-border operations that promote growth and global expansion.
Toh Su Mei, a former DBS bank executive, will lead ANEXT. He’ll leverage Ant’s “deep-batch of technologies” to continue serving the SME community.
The Monetary Authority of Singapore (MAS), last Thursday approved the digital bank. It will offer a preview of its dual currency deposit account. These features include three-factor authentication verification, remote registration, daily interest, and remote onboarding. These accounts can be opened by business owners starting in Q3 2022.
To serve small and medium-sized businesses and other non-retail sectors, Ant’s wholesale bank license issued by MAS will require a capital commitment in the amount of S$100million ($73 million). ANEXT Bank is among the two applicants that are granted such a license.
Ant also signed a Memorandum Of Understanding with Proxtera for a two year period. Proxtera is a local entity backed MAS and Singapore’s Infocomm Development Authority. This agreement will create an open environment for financial institutions to collaborate with Ant and support the SME community.
Ant’s recent move could have been a response to its strategy of using Singapore as its base in the Southeast Asian market. Ant Group reportedly increased its global expansion efforts after Chinese regulators stopped its October 2020 IPO attempt. This was in response to the slow-growth of the domestic economy and regulatory reforms.
Singapore is a country that has embraced cryptocurrency, in contrast to China’s notoriously hostile stance. MAS is rumored to be partnering with JP Morgan Chase and DBS Bank to launch an initiative to explore DeFi. This will help guide the nation’s efforts towards becoming a cryptocurrency hub.
In a statement, Sopnendu Mhanty, MAS’ chief financial officer, stated that the authority would “ensure the bank sector remains progressive and globally competitive and vibrant.”
Featured Image Courtesy Of Reuters
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