Ant Group launches digital bank in Singapore, its first outside of China

• Known as ANEXT Bank, the digital wholesale bank in Singapore will focus on providing digital financial services to local and regional MSMEs, especially those with cross-border operations.
• Ant Group also signed an MoU with online marketplace Proxtera to create an open framework for collaboration with financial institutions. 

Jack Ma’s Ant Group is the world’s largest e-finance provider; it runs Alipay, one of China’s largest online payment systems. Yet, the group is not foreign to conflicts with its local financial regulators, as it has been navigating through uncharted waters even before its blockbuster IPO were derailed. But while it tries to meet the requirements of the Chinese regulators, Ant Group was also getting busy with foreign expansion — where regulatory hurdles are far more bearable.

This week, Ant Group, which is affiliated with e-commerce giant Alibaba, launched a digital bank in Singapore–its maiden in Southeast Asia. The move marks one of Ant’s biggest overseas pushes since its US$37 billion stock debut was derailed by Chinese regulators in late 2020. The digital wholesale bank, dubbed as ANEXT Bank, will focus on serving regional micro, small and medium enterprises – especially those with cross-border operations. 

The soft launch of the wholly-owned subsidiary of Ant Group in Singapore today came after the approval from the Monetary Authority of Singapore (MAS) to commence business on 2 June 2022.  Ant was among the two groups to get a wholesale digital banking license in December 2020, allowing it to serve small and mid sized firms and other non-retail segments. 

The license requires a capital commitment of S$100 million (US$73 million). In comparison, a full digital bank license, which can serve all kinds of customers, requires S$1.5 billion in capital as well as local control. In a statement, Ant said it will also partner with Proxtera, a local entity that’s part of a public initiative led by MAS and Singapore’s Infocomm Media Development Authority, to create an open framework for collaboration with financial institutions. 

In a statement, MAS’ CFO Sopnendu Mohanty said he expects the digital banks to thrive and synergise with their dynamic financial institutions and raise the bar in delivering quality financial services. He also hopes to uplift Singapore’s financial sector to better support the growth of SMEs in Singapore, the region and in emerging markets.

In conjunction with the soft launch of the digital wholesale bank, ANEXT Bank signed a two-year MoU with Proxtera – “to transform and enable holistic cross-border trade among SMEs and businesses through making marketplaces efficient and discoverable globally, with embedded financing, fulfillment services and SME empowerment,” the statement reads. Basically, ANEXT Bank will also be Proxtera’s first participating digital wholesale bank in Singapore to lead the way in providing financing solutions to the buyers and sellers on Proxtera’s network. 

ANEXT Bank CEO Toh Su Mei, said, “We believe it’s time to offer the next generation of financial services that are accessible and effortless for growing businesses. Amid rapid acceleration in the digital economy, business models are changing and pivoting to become digital-first, if not adopting a hybrid model. Financial services have to evolve and be where SMEs are doing their businesses digitally.” 

The digital wholesale bank in Singapore will also provide a preview of the ANEXT Business Account, a dual-currency deposit account with proprietary security measures including three-factor authentication verification as well as features such as remote onboarding and daily interest. While entries as well as registrations of interest to open an account are available from today, the ANEXT Business Account will only be made available to the general SME community from the third quarter of this year. 

Ant’s payments app Alipay, as of August 2020, had about a billion annual active users. Outside of China, the company has invested in 10 digital wallet operators, including Paytm in India and Dana in Indonesia. ANEXT Bank, according to Toh, will leverage Ant Group’s technologies and know-how, and cooperate with partners to provide “simpler, safer and more rewarding” financial services to SMEs.”

ANEXT Bank was one of four candidates in 2020, including a unit of consumer tech giant Sea and a consortium between ride-hailing giant Grab and telecommunications conglomerate SingTel, to be granted a digital banking license by the MAS. While Ant’s license covers only wholesale banking only, Grab and Sea will be allowed to serve both retail and corporate customers.

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