SINGAPORE – Standard Chartered Bank is “clearly interested” in applying for a digital banking licence here with Asean and South Asia chief executive Judy Hsu noting on Monday (Sept 9) that the benefits outweigh the risks.
StanChart has already joined forces with non-banking partners to win a digital banking licence in Hong Kong, where it is more dominant in serving affluent customers.
Its new digital offering there is aimed at millennials, who make up a smaller segment of its market share, Ms Hsu told a briefing.
She also noted that the bank is investing in new business models and partnerships to “disrupt” itself.
Finding a like-minded partner is a key consideration if it decides to apply for a digital banking licence in Singapore, she said. Applications are open until Dec 31.
StanChart, one of four foreign banks with a significant retail presence here, is in talks with potential partners, said Ms Hsu.
The Monetary Authority of Singapore will issue up to two licences for digital full banks, which can take retail deposits, and three for digital wholesale banks. These will be able to take deposits from small and medium-sized enterprises and other non-retail segments.
Singapore-incorporated banking groups can set up digital full bank subsidiaries under an existing framework, but StanChart is unable to do so as Britain, its country of origin, has no free-trade agreement with Singapore.
StanChart will also need to link with a local partner to apply for one of the new digital banking licences.
But Ms Hsu noted that not having a licence does not prevent the bank from providing digital offerings in the region.
She cited how StanChart is launching such options for clients in India, where customers will be able to access all products and services digitally, from account-opening to service requests.
Singapore is set to be at the centre of StanChart’s planned Asean hub while other hubs will be set up in Britain and Hong Kong.
Ms Hsu also addressed the situation in Hong Kong, where protests have taken place for 14 consecutive weekends.
She noted at the briefing that the business impact has been “very minimal so far” adding: “Certainly, small- and medium-sized enterprises and retail business in Hong Kong are impacted, and that may impact some of our clients … but that hasn’t flowed through to our business yet.”
If protests continue, overall sentiment may be hit, although she added that the Hong Kong government has introduced a stimulus package to help smaller businesses.
“So far, we’re doing okay but watching (the situation) closely,” she said. “We can’t underestimate what could happen.”
She added that StanChart remains focused on the Greater Bay Area in China and noted also that nine of StanChart’s 12 markets across the region are growing – with Thailand, the Philippines and Brunei the laggards.
Ms Hsu said StanChart plans to go more into “capital-light businesses” such as those related to foreign exchange, wealth management and deposits instead of focusing so much on its traditional strategy of lending.
The bank’s income from capital-light businesses in Asean and South Asia made up 60 per cent of its total for the first half of the year, up from below 50 per cent previously, she said.
“It’s a shift in our portfolio,” she said. “It’s not only the topline that is growing… the quality of our portfolio is improving. The mix of our income is improving.”