As Chinese Digital Banks Arrive, OCBC Gets Ready
When asked if Oversea-Chinese Banking Corp is ready to take on Chinese technology companies looking to take a piece of Singapore’s banking market, the lender’s top executive said they are well-positioned.
Jack Ma’s Ant Financial Services Group has announced interest in Singapore’s digital banking licenses, but Oversea-Chinese Banking Corp’s (OCBC) chief executive Samuel Tsien is unfazed with the arrival of Chinese technology companies.
This is because he views these Chinese technology companies as «extended» competition rather than new competition. Moreover, the local lender has its own digital banking plans – it has agreed in principle to join a group led by peer-to-peer lender Validus Capital and Temasek Holdings’ venture-capital arm to apply for a wholesale digital banking license before a year-end deadline, Bloomberg reported this month.
The bank and its partners are looking to provide a platform to expand in the lucrative South-east Asian market. «We are talking to various parties but we have not made a final decision whether we would go in or not,» said Tsien.
It’s attractive to us because it’s the way that we can test out in the new digital economy as to what we could do.
Earlier this year, the Monetary Authority of Singapore (MAS) unveiled plans to grant as many as five virtual bank licenses to boost competition and innovation in the nation’s financial industry. China’s Ant Financial and Ping An Insurance (Group) are among companies considering applications, and Tsien said OCBC may join the race, both as a bank, and through its insurance unit.
Another reason that OCBC is unfazed is due to high regulatory hurdles greeting new digital banks. Not only must they do proper Know your customer processes and transaction monitoring, they are also not allowed to offer unrealistic deposit rates just to gain market share, he added.
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