A ride-hailing service and leading telecom group will team up to launch a digital bank.

Grab and Singtel have jointly bid for a digital full bank license to be issued by the Monetary Authority of Singapore (MAS). The consortium (Grab 60%, Singtel 40%) will bring banking services to under- or unbanked Singapore communities. The proposed bank will be able to serve retail customers, lend money, and take deposits, along with other online banking functions, according to PYMNTS.com.

The JV will bid for one of five digital banking licenses that MAS offered in June 2019. Two of these would be digital full bank licenses and three digital wholesale bank licenses. However, other companies are also in the race for licenses. These include Standard Chartered Bank, NTUC Enterprise, the V3 Group, and Razer.

Grab, and Singtel both have financial experience

Both JV partners offer financial services, including Dash, VIA, GrabPay and GrabInsure.

“With their combined digital capabilities, fintech know-how and insights from operating customer-centric businesses, the consortium is primed to create a new, digital-first model of banking that is easy to use, affordable and accessible,” their statement said.

Specifically, the fintech partnership will address the “unmet and underserved needs” of digital-first consumers and medium-sized enterprises (SMEs).

Grab and Singtel both have scale

Singtel is Singapore’s largest telecom company with a base of more than 700 million customers across the region, including in the Philippines, Thailand and Indonesia.

Grab has a user base of 166 million across the region, and operates widely-used e-wallets in Singapore, Malaysia, and Vietnam.

December 31 is the last date for the submission of applications for the digital bank license. MAS will announce its choice of successful applicants by mid-2020.

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