Singapore to allow banks to enter non-financial e-commerce

SINGAPORE: Singapore will streamline regulatory requirements for banks seeking to conduct or invest in non-financial businesses and also allow them to operate non-financial e-commerce platforms, as banks face rising competition from nontraditional players.

Finance Minister Heng Swee Keat, speaking at an event organised by the Association of Banks in Singapore late yesterday, said these will be businesses that are related to or complementary to banks’ core financial operations.

“The line between financial and nonfinancial business is blurring. Banks are facing increasing competition from online and non-financial players that have leveraged their large user base to provide digital wallets, payments and remittance services,” Heng said.

“To maintain our competitive edge, we must ready ourselves for the next wave of change,” he said.

In this year’s budget, Singapore unveiled projects to invest in infrastructure, deepen the workforce’s technology skills and digitalise the economy.

The Monetary Authority of Singapore (MAS) said in a statement it will allow banks to engage in the operation of digital platforms that match buyers and sellers of consumer goods or services as well as the online sale of such goods or services. Banks are currently prohibited from selling consumer goods.

MAS said banks need not seek prior regulatory approval before conducting or acquiring major equity stakes in permissible non-financial businesses.

To limit their exposure and ensure that banks continue to focus on their core businesses, MAS will cap such permissible non-financial operations to 10% of the banks’ capital.

MAS will issue a consultation paper on the policy changes by the end of September. – Reuters