SINGAPORE, Jan 3 — The financial technology (fintech) arm of gaming company Razer has partnered with supermarket chain Sheng Siong and a host of other companies to apply for a digital full bank licence in Singapore.
In a media statement yesterday, Razer Fintech said that it is also partnering with service providers such as travel booking platform Skyscanner, payment solutions provider Visa, fintech startup SoCash and an undisclosed airline to provide “bespoke” financial services and products for youth.
This consortium led by Razer Fintech is the second one to announce its bid for a digital full bank licence in Singapore, three days after Singtel and Grab revealed their partnership.
Alibaba’s Ant Financial also said on Thursday that it has applied for a digital wholesale bank licence.
In June last year, the Monetary Authority of Singapore (MAS) announced that it will issue up to five new digital bank licences in a major move to liberalise the banking industry here, paving the way for fintech companies to become fully fledged banks.
In the latest development, Razer Fintech will take up a 60 per cent stake in the consortium, while the remaining 40 per cent will be taken up by:
The statement did not state how the 40 per cent stake would be spread among these five equity partners.
Razer Fintech said that it would be leveraging Razer’s youth and millennial branding to develop the world’s first youth bank, focusing on millennials in particular.
Called Razer Youth Bank, it will be headquartered in Singapore.
“Razer Fintech believes that its application achieves the objectives as laid out by MAS in the released framework through a differentiated strategy and value proposition, targeting the needs of the under-served youth and millennials segments of Singapore through innovative use of technology.”
The service providers it is partnering with which do not hold an equity stake or a share in the consortium will be creating services and products for the Razer Youth Bank in a way that will “redefine banking” for youth, it said.
Co-working space operator JustCo, online trading firm Saxo Markets and financial education media platform Real Vision are some of the other service providers on board.
The consortium seeks to expand the list of service providers, in line with its objective of creating an open banking platform where multiple partners can tap the millennials market, Razer Fintech said.
Besides targeting the younger set, it also aims to serve the needs of budding entrepreneurs as well as small and micro enterprises, which often face challenges in raising capital to fund growth.
What consumers can expect
Based on the service providers and equity partners collaborating with Razer Fintech, analysts and observers told TODAY that they seem to be creating a single platform to offer consumers various kinds of services.
Richard Wong, vice-president of tech consultancy Frost and Sullivan, said that it could be an all-in-one platform for the youth, very much like how WeChat caters to Chinese consumers.
Timothy Chen, co-founder of MaxFinx, a Singapore tech startup that provides digital banking infrastructure, said: “They’re trying to create another super app like Grab. Is this the right direction? I’m not sure... Grab is already in it and slightly ahead of them.”
Analysts also said that the consortium seems to be honing in on travel as a lifestyle offering for users.
This is not surprising considering that travel is a very attractive option for consumers of the younger generation, including those in Singapore, Wong said.
The digital bank can tie in insurance and travel expenditure needs as well as foreign exchange services in one attractive product offering for the younger generation, he added.
Varun Mittal, the fintech lead for emerging markets at consultancy firm EY, said that since young people like to travel in a group, digital bank consortiums can come up with a product that allows them to do so.
“It’s the idea of ‘I can have more freedom and more control’,” Mittal said.
When asked how this consortium compares with the tie-up between Singtel and Grab, Wong said that he was a little surprised with the inclusion of Sheng Siong as it is a traditional supermarket.
“The only play I can think of in terms of Sheng Siong is equity play. Sheng Siong is cash-rich and has a strong financial footing. It adds to their credibility.”
While Mittal expected all bids to come from consortiums, what was unique about this particular one was the number of organisations involved, whether they have a share or stake in the consortium or not.
Given that digital banks do not have physical branches as traditional banks do, they need to gather as many touch points that align with the lifestyle of an average consumer, be it travel, transport, shopping and more.
So the more players there are involved, the more touch points it has under its belt, he pointed out.
“There are pros and cons of large partner ecosystems — you have to manage many people. Every consortium which has large diversity also means there is the challenge of managing diversity,” Mittal said.
Chen of MaxFinx believes that Razer is very strategic in selecting its partners, but he noted that all of them have weak digital banking experience. — TODAY