Ant Group Co. launched its digital bank in Singapore, as China’s largest online financial platform branches out of its home market amid regulatory headwinds. ANEXT Bank will provide digital financial services to micro, small and medium-sized enterprises, particularly those with cross-border operations. The fintech giant is entering an arena dominated by traditional incumbents including DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. Using Singapore as a base for its business in Southeast Asia may offset slower growth prospects at home after government-ordered regulatory overhauls. Part-owned by Alibaba Group Holding Ltd., Ant can also benefit from the e-commerce operator’s unit in the region, Lazada.
The digital bank is starting by offering a preview of its dual-currency deposit account, which includes three-factor authentication verification, remote on-boarding and daily interest. Ant was one of two groups to get a wholesale digital banking license in December 2020, allowing it to serve small and midsized firms and other non-retail segments. It requires a capital commitment of S$100 million ($73 million). That compares with a full digital bank license, which can serve all kinds of customers and eventually requires S$1.5 billion in capital as well as local control. Ant will also partner with Proxtera, a local entity that’s part of a public initiative led by the Monetary Authority of Singapore and Singapore’s Infocomm Media Development Authority, to create an open framework for collaboration with financial institutions. Singapore’s efforts to open the banking industry to technology companies come on the heels of a similar move in Hong Kong, where Ant and Chinese competitors including Tencent Holdings Ltd. obtained licenses in 2020.