SINGAPORE – The Bank for International Settlements (BIS), dubbed the central bank for the world’s central banks, will establish an innovation hub centre in Singapore in a move that Singapore’s central bank said reflects the Republic’s position as a leading international fintech centre.
SINGAPORE will issue up to five new licences to digital banks and begin taking applications from August, in one of the biggest liberalisation steps taken by the city-state in years.
The maximum of five new digital-bank licences to be issued in time will comprise up to two digital full-bank licences, and up to three digital wholesale bank licences. They must all meet the same capital requirements as local banks. This is in addition to any digital banks that the local banking groups may also establish.
This was announced on Friday night by senior minister and the chairman of the Monetary Authority of Singapore (MAS) Tharman Shanmugaratnam at the annual Association of Banks in Singapore (ABS) dinner.
“The new digital bank licences mark the next chapter in Singapore’s banking liberalisation journey,” said Mr Tharman.
The digital full-bank licence will allow licensees to provide a wide range of financial services and take deposits from retail customers. A digital wholesale bank licence will allow licensees to serve SMEs and other non-retail segments.
The aim, The Business Times (BT) understands, is to tackle the segments that may be underserved, such as small businesses. This is done without compromising the anchoring position of the local banks, which hold a significant market share collectively, to prevent systemic risk.
BT also understands there have been informal talks with potential applicants – from both Singapore and overseas – that are keen to tap this new licensing framework.
Application for the digital full-bank licences is open to companies headquartered and controlled by Singaporeans. Foreign companies can apply for these full-bank licences if they form a joint venture with a Singapore company. Applicants must have a track record in operating an existing business, or in technology and e-commerce fields. They must also show clearly how they can tackle unmet needs, and show it has a sustainable digital banking business model. Any competition deemed to be “value-destructive” will not qualify.
At the first stage, the digital non-wholesale bank – that is, the digital full bank – will operate as a restricted bank.
This restricted digital full bank will have an initial paid-up capital of S$15 million. Aggregate deposits will be capped at S$50 million and an individual’s deposits will be capped at S$75,000. To add, the bank can only accept deposits from a small group of persons such as business partners, staff and related parties. With that, it will have to participate in the deposit insurance scheme, which protects deposits of up to S$75,000 per depositor in the event of the bank’s failure.
Such a digital bank – at its restricted stage – can only offer simple credit and investment products. It cannot offer complex investment products such as structured notes, and cannot engage in proprietary trading. It will also be restricted in banking operations in no more than two overseas markets, and must be incorporated in Singapore. Its liquidity requirement will stand at 16 per cent of minimum liquid assets.
Once MAS deems that the restricted digital full bank performs to show, among other things, good quality of loans, and a well-managed business, the restricted digital full bank will be graduated to a full functioning digital bank by the regulator. No timeline has been set by MAS on this front. But at that point, a graduated bank will need to meet the minimum paid-up capital requirement of S$1.5 billion, and face the same liquidity requirements as local banks, which means a 100 per cent in net stable funding ratio, and 100 per cent in liquidity coverage ratio.
The application for up to three digital wholesale bank licences for SMEs and other non-retail segments is open to all companies – both Singapore and foreign ones. For such applicants, the minimum paid-up capital is S$100 million. They cannot take Sing-dollar deposits from individuals, except for fixed deposits of at least S$250,000. But they can open and maintain business deposit accounts for SMEs and corporates.
This comes as Hong Kong in March opened its doors to virtual banks, with some arguing that it is playing catch-up to the digital banking trend.
Singapore – a heavily banked country – has already seen several of the traditional banks here investing heavily in digital capabilities in recent times. The local banks are also fairly well-entrenched, with Singapore’s top three banks estimated to hold a combined market share of just over 50 per cent. The market will watch if virtual banks – with their nimbleness but a much smaller asset base – will be able to wrest market share from the big guns here.
Hong Kong has already issued eight licences, with the most recent batch of four licences given out to entities linked to China’s top technology companies including Ping An, Ant Financial and Tencent. The earlier batch of licences went to applicants that are joint ventures between traditional banks and non-bank entrants. These virtual banks in Hong Kong are roughly expected to begin operations in six to nine months.
The Minterest Group is pleased to announce the opening of our consumer financing business, QianNow.
Selected and regulated by the Ministry of Law to pilot new consumer lending practices in Singapore, QianNow utilises proprietary credit scoring algorithm to instantly assess the creditworthiness of each individual based on a combination of traditional data as well as non-traditional data such as bank transactions, psychometrics and even one’s social networks.
Technology is changing the way we live, work and play. With more people opting for flexibility and autonomy at work, we are witnessing the rise of the gig economy in Singapore. Currently, at least 10% of the workforce are contract workers/freelancers, and nearly half of the working population expressed interest in being part of the gig economy. QianNow is designed to meet their needs as jobs evolve and for the future workforce.Using digitalised credit scoring algorithm to assess the credit worthiness of individuals, we are able to lower the overall financing cost to individuals by as much as 50% of the current bank credit card financing rates. We believe QianNow will be a safe and cost effective option for individuals.
Meet the QianNow team ….
Did we say Personalised and Cost Effective Interest Rates?
With QianNow, say goodbye to a one-size-fits-all model, and instead welcome a new model where the amount of data which a borrower provides will determine a unique and personalised interest rate that is an accurate reflection of the financing cost each borrower should have to bear. There is no penalty for early repayment and the online application is simple and fast, allowing you to log onto the platform anytime, anywhere.
Read more at blogqiannow.com and to apply for a loan under 5 minutes, click here.
Don’t forget to follow us on social media to keep up to date with the latest news and see what we’re doing.
TECHNOLOGY, and in particular Financial Technology or Fintech, has the ability to accelerate access to financial services for the unbanked and significantly reduce costs for businesses.
Given that 70% of the ASEAN consumer market are younger than 40 years of age and with the emergence of a highly digitally active middle-class population across Southeast Asia, the internet economy is expected to reach a high of US$200 billion by 2025.
Furthermore, research estimates that there will be more than 480 million internet users by 2020. It comes as no surprise that the Fintech revolution is only just beginning in Singapore and Asia.
On the backdrop of this vast potential and steep growth of Fintech, Minterest was incorporated in March 2016 and licensed by the Monetary Authority of Singapore to facilitate the offering of loans to SMEs from investors around the region. It is a leading online marketplace funding platform founded by a team of former bankers with more than 155 years of collective experience in corporate and structured finance.
By providing quick and efficient access to capital, Minterest seeks to alleviate companies that have difficulties receiving financing from banks through offering an alternative solution to this pain point. Its sister company, QianNow Pte. Ltd. (https://qiannow.com), will also be providing consumer loans to Singpore based individuals at a rate that commensurates with the individual’s risk profile. Individuals will be able to enjoy their own personalized interest rate, instead of a standard rate across the entire population.
Minterest’s marketplace funding platform (https://minterest.sg) is based on the motto “financing made simple, investments made easy”, which is what borrowers and investors will experience when using their platform. Minterest believes that each borrower and its requirements are unique, therefore a one-size fits all model practiced by banks or finance companies will do no justice to the requirements of different SMEs and organisations.
That is why Minterest’s credit assessment process takes into account the exact requirements of each enterprise before delivering an appropriate financing solution. This also allows Minterest to offer well-structured, risk-mitigated investments to its investors.
Instead of using conventional methods of assessing propriety credit, Minterest believes in alternative methods that are more tailored to individual companies and invests heavily in relevant technologies to deliver on this directive.
For instance, they have built and developed their own proprietary credit assessment algorithm (“MintGrade”) to assess an organisation’s or SME’s loan application, leveraging on data obtained from independent third-party sources such as credit payment profiles and litigation searches.
Borrowers are then efficiently and effectively matched with investors using this technology resulting in endless possibilities for borrowers to reach a wide-ranging investor base.
“Using our proprietary credit scoring model with over 350 data points of each borrower, we are able to curate a strong portfolio of creditworthy borrowers who would be underserved or unserved by the traditional credit providers,” explains Minterest co-founder and CEO Charis Liau.
Generally, funding are secured within 2 weeks, or in a matter of days. 97% of all deals listed on the Minterest platform are funded by investors within a day. The speed, efficiency and certainty of Minterest’s process paves a new way of fund raising for corporates.
Diversification is key to successful investing and that is why financial inclusion is at the heart of Minterest and their operations. Minterest offers a variety of loan and invoice finance products to allow its investors to diversify across multiple borrowers as well as across a broad risk spectrum.
They empower investors by allowing them to participate and invest easily in business loans from as low as S$250. Loan sizes range from $30,000 to over $3 million with average tenor less than 6 months.
As marketplace funding gains traction and becomes more mainstream, larger corporates are also seeing the benefits of raising funds through a wide pool of investors. Minterest have welcomed such initiatives as their goal is to build tomorrow’s financial ecosystem to be one that served rather than rules.
As part of its expansion roadmap, it will be investing heavily into blockchain and artificial intelligence technology.
Minterest Group has been amongst the few chosen by the Ministry of Law to pilot new money lending practices in Singapore. Under the consumer finance umbrella, QianNow will serve the needs of consumers in Singapore who require financing for various productive reasons such as medical and healthcare loans.
It employs ground breaking credit analysis taking into account one’s unique personality educational background and job history in assessing the credit profile of an applicant. Psychographic tests are also being incorporated as part of their credit assessment system for a more accurate evaluation.
Minterest’s efforts to develop the Fintech industry have not gone unnoticed. It has been recognized as the Top 25 Fintech Companies in Asia Pacific (2017) and the top 25 Hottest Fintech Companies in Asia Pacific (2018) by the APAC CIO Outlook. Best Peer to Peer Lending Platform, in Singapore by Global Business Insights, 30 Best Small Companies to Watch 2018 by The Silicon Review, Top 30 Most Influential Entrepreneurs to Watch 2018 by Insights Success and now attaining the Business Eminence Award by Dun & Bradstreet Singapore.
With their current endeavors and plans for the next few years, Minterest is achieving its vision of creating a sustainable community in which investors and businesses mutually benefit by collaborating and leveraging on innovations in financial technology.
On 7 May 2019, we held our third Member’s Night at The Screening Room. This coincided with Minterest operations turning 2!
Thank you Members for joining us in your investment journey and we were very glad to connect with our members through this event.
The strong men at work!
After completing the set up, we proceed on with the registration and guided the new members through the signing up process.
Starting It Off
Firstly, we started off with a welcome speech by our Co-Founder and CEO, Charis Liau as she shares about our Minterest story. We hope you enjoyed the short video regarding Minterest in general and get a glimpse of what we do.
Next, we have our Co-Founder and COO, Ronnie Chia to introduce the Minterest team.
Following, we had our talented client ambassadors – Rong Yao, Rick and Arnold to share with everyone the future of the financial services industry, our borrower’s journey as well as an investor’s journey on Minterest.
Last but not least, we shared about our auto invest allocation algorithm and FAQ. We also introduced our NEW consumer financing arm – QIANNOW during the presentation. We hope you have a better understanding of who Minterest is and what we do. Qiannow is commencing operations 1 June 2019 so stay tuned for new updates!
After The Presentation
After the presentation, we mingled around, and enjoyed the food and drinks!
Thank you to all members who came down for this event. We hope to see more of you at our next member’s night!
Don’t forget to follow us on social media to keep up to date with the latest news and see what we’re doing.
Our Co-Founder and CEO, Charis Liau was named one of the Top 100 Fintech Southeast Asia Influencers 2019 by LATTICE80.
LATTICE80 is a global Fintech Hub and a community with more than 11,000 Fintech startups and 200,000 professionals in their database. They believe that the fastest way to grow is by collaborating and helping one another through partnerships.
In this list, LATTICE80 highlights the top 100 Fintech leaders in Southeast Asia who are actively involved in growing and developing the ecosystem here. This list of influencers was picked from in-house research and include startup founders, government and regulatory leaders, members of financial institutions, advocacy groups and investors.
Southeast Asia is a region that presents booming potential for Fintech right now. After all, the region has a population of more than 640 million people with around 50% of its population under 30 years old. Along with the robust macroeconomic growth the countries are experiencing, the young, digitally-savvy population will help to stimulate middle-class spending, in turn driving demand for financial services.
Due to the nature of the largely underbanked population, the development of this regional ecosystem can be observed in waves – firstly from a rise of payment services, to e-wallets, followed by lending, regtech, and insurtech.
While Singapore leads the way as a Fintech hub, other countries are also making much progress through regional collaborations.
The ASEAN Financial Innovation Network (AFIN), for instance, was launched by the Monetary Authority of Singapore (MAS) in 2018 and aims to support financial services innovation and inclusion in less developed markets within the ASEAN region and to provide a platform for collaboration and innovation for financial institutions and Fintech startups. Also, the governments of Cambodia, Laos, Myanmar, Thailand and Vietnam have committed to work together on a cross-border fund transfer scheme, which is due to be rolled out this year.
Key Highlights from the Top 100 Fintech Southeast Asia Influencers 2019 list by LATTICE80
Of the 100 influencers, 42 are based in Singapore, 12 in Malaysia, 11 in Indonesia, 11 in Thailand, 10 in the Philippines, 6 in Myanmar, 6 in Vietnam, and 2 in Cambodia.
Also, 62 hold key positions in fintech startups, 25 facilitate innovation partnerships and transformations in corporates such as banks and insurance companies, 9 are enablers leading national fintech associations or accelerator programmes, and 4 are investors who focus their investments into fintech startups and projects.
Congratulations to all these regional Fintech leaders charting new territories for Fintech in SEA on this list!
This article was contributed by LATTICE80.
Minterest is honoured and humbled to be a recipient of the Dun & Bradstreet Business Eminence Awards 2019 which was held on 15 March 2019.
The Business Eminence Awards is an initiative by Dun & Bradstreet Singapore to celebrate the nation’s vibrant tradition of entrepreneurship. It is also to recognize and showcase the achievements of Singapore companies that are the critical cogs in shaping the business landscape in Singapore over the past year.
This award recognises our efforts in delivering relevant solutions to meet the financing needs of the small and medium enterprises (SME) community in Singapore, whilst offering diverse, well-structured investment opportunities to our platform investors using innovative technology to simplify the investment process.
Firstly, thank you to all our members who have shown great support to the SME business which are the workhorses of the Singapore economy. We also would like to thank our SME clients for entrusting your financing needs to us as we share your vision in your business undertakings.
Thank you Dun & Bradstreet for this award. Last but not least, well done team Minterest Private Limited for making this possible.
We look forward to delivering more financial solutions to our community of investors, and serving the underserved and unbanked in the ASEAN region.
Minterest’s first volunteering experience with TOUCH Home Care! On 30 January 2019, our team decided to spend our afternoon out of office to participate in the Meals-on-Wheels programme. As Chinese New Year is approaching near, we also brought along some mandarin oranges to wish our beneficiaries a very Happy New Year.
Meals-on-Wheels is a meal delivery programme to meet the daily needs of the home-bound elderly. The elderly, who usually live alone, depend on volunteers from TOUCH Home Care’s Meals-on-Wheels to deliver their meals every day.
Before we start…
Let’s take a team picture! And now we’re ready to go!
The delivery experience
Our boys preparing the food and moving off for delivery! All beaming with joy and excitement to make a difference.
The ladies are also working hard! Everyone is eager to contribute back to society!
And we are all done after 2 hours! Hope the elderly enjoyed their meals!
Time for team drinks!
After we complete all of our assigned deliveries, we gather back and reward ourselves with some team drinks! This has certainly been a meaningful experience for the whole of Minterest team!
If you are interested to volunteer in such initiatives, do get in touch with TOUCH Home Care.
An algorithm that reads your social media feed, gets a fix on your digital personality and analyses your
online interactions with friends and family may now be able to determine if you get a loan.
The Law Ministry selected six firms last month (including Minterest) to pilot new business models for moneylending while also temporarily lifting a 2012 moratorium on new licences needed to operate in the sector.
The idea of using personal data to forecast a person’s likelihood of default is being explored by some
licensed moneylending firms here in what is an industry first.
The Law Ministry selected six firms last month to pilot new business models for moneylending while also temporarily lifting a 2012 moratorium on new licences needed to operate in the sector.
Its moves come as personal loans are on the rise. Singaporeans accumulated nearly $60 billion of debt,
excluding housing, credit cards and car loans, in the third quarter of last year.
The key factor for moneylenders is the credit score, which is used to discern a person’s financial reliability based on his credit track record and income levels.
But determining risk of non-repayment, even with the already strong credit bureau that Singapore has, is not an exact science, say those participating in the trial.
Credit reports may not necessarily reflect a borrower’s immediate financial situation, such as when they
have lost a job recently, said our co-founder Ronnie Chia.
Psychometric analysis, which feeds on social media and other online data from borrowers, allows lenders to determine the character and personality traits of borrowers.
These are important indications of the willingness to repay loans, said Mr Chia.
Mr Jonathan Chong, IFS Capital’s vice-president of business planning and analysis, said lenders will be able to assess the borrower better and faster by considering these additional data points.
“With permission, we can overlay the digital footprint of a user, including social and professional
connections, with the personal and financial data to help us form a more holistic picture of the (borrower),” said Mr Chong.
A more positive credit score means a borrower will get a more favourable interest rate that reflects his risk profile, said Mr Chia.
But there are dangers in giving the computer full autonomy in deciding whether a person is likely to go into delinquency, given that the accuracy of AI-driven risk assessments is sometimes questionable.
United States-based non-profit organisation ProPublica found how risk scores produced by artificial
intelligence were unable to accurately tell if a defendant is likely to commit a future crime, even though
these scores are already used in US courtrooms to guide judges during sentencing.
Its 2016 study found that the algorithm, which was developed by a private company, was “remarkably
unreliable” – only one in five people flagged as likely to commit violent crime went on to do so.
It also found that the system unfairly pegged African-American defendants to be at a higher risk of
committing crime than white Americans.
And even when accurate, the use of credit scores to determine risk and reward can be controversial.
China’s newly deployed social credit system, for instance, has been decried as Orwellian by critics for
penalising everyday behaviour.
Chinese citizens have been barred from buying flight and train tickets or purchasing property in recent
months due to a low score from loan defaults or other activities deemed to be anti-social.
These dangers are why there is a need for the Law Ministry’s pilot, so that the personal lending industry
can find out what safeguards are necessary as it heads towards the adoption of AI and big data analytics,
said Mr Edmund Sim, founder of fintech start-up Credit Culture.
However, even detractors of AI cannot deny the superhuman efficiency of computer algorithms, big data
and machine learning employed in various industries today.
Humans can get it wrong even without AI, and they do so while incurring higher costs that will eventually show up on the borrower’s bill.
In a demonstration at his Craig Road office, Mr Sim showed The Straits Times how its credit scoring engine analyses and scores applicants for their creditworthiness almost instantly.
He declined to give specifics on the algorithms used as they are proprietary to the firm.
While accuracy is a concern, machine beats man on one key element – algorithms apply their standards
universally and eliminate any form of bias associated with human intervention, said Mr Sim.
“Technology can benefit consumers by making things simpler, cheaper and more transparent, allowing
them to make better informed decisions,” he noted.
“The question now is the extent to which technology can be used in personal lending.”
The size of the Southeast Asian alternative financing market grew from US$46.65 million in 2015 to a whopping US$215.9 million the following year. That’s almost a fivefold leap in market value in just the span of a year, according to a study jointly conducted by the University of Cambridge and Monash University.
The United Nations estimates that Southeast Asians make up approximately 659 million of the world’s population at the time of writing—and among these numbers, a plethora of them come from regions that have traditionally been underbanked or underserved during the days before the word ‘fintech’ made any sense.
Without access to a bank account, and even if they do, a trackable credit record, these populations have been precluded from receiving loans from traditional financial institutions and thus, takes away a lot of opportunities for many of these populations to bring themselves to a higher economic standing.
P2P lending platforms have risen to address this specific problem, many able to offer smaller loans, and thus more lax terms. Digitisation or a good mobile layout also means that these platforms are able to penetrate more communities more quickly and with less upfront cost.
The rising stars of this industry will probably be coming from Indonesia, that has seen both massive demand, and a permissive regulator that deems P2P lending a viable strategy for helping its constituents rise out of poverty.
Capital Match, which was established in 2014, provides business and SME loans and invoice financing facilities of S$50,000 to S$200,000. The platform had funded S$62 million in loans, as of December 2017. Capital Match has raised S$1 million in funding so far from Innosight Ventures, Crystal Horse Investments and CE-Tech Invest.
Capital Springboard is the latest venture by David Rawson-Mackenzie, who specialises in wealth and alternative financial strategies. David’s network of companies, the Centurion Group, offers a full suite of financial services for private and institutional investors. Capital Springboard is one of the the largest P2P invoice finance platforms with more than S$170 million worth of invoices transacted as of October 2017.
CoAssets Pte Ltd is a Southeast Asian public listed crowdfunding site with offices in Singapore, Australia, Malaysia, China and Indonesia. CoAssets Pte Ltd brings real estate developers, businesses and investors together, with in excess of S$43 million worth of transactions taking place through the platform in the last two years. They have also launched Crowdfunders.Asia, a magazine that is dedicated to all things related to crowdfunding to benefit the crowdfunding community.
Crowdo is a regional fintech company offering a full portfolio of alternative financing solutions across peer-to-business lending and securities / equity crowdfunding launched in 2013.
Crowd Genie is a platform where we match Small and Medium size companies who are looking to borrow funds with investors who are looking for better returns than what they get from the banks. Crowd Genie also launched their own token, CGCOIN.
FundedHere is the first registered equity and lending-based crowdfunding platform for promising businesses in Asia, issued by the Monetary Authority of Singapore (MAS). FundedHere has built an ecosystem for both investors and businesses, leveraging on Singapore as a springboard for the rest of Asia. The platform connects promising tech startups in Southeast Asia and Greater China with professional and accredited investors. Launched in March 2015, FundedHere obtained its CMS license from MAS in 2016.
Funding Societies is a regional P2P lending player operating in Singapore, Indonesia and Malaysia. The company was founded by Kelvin Teo and Reynold Wijaya who were both Harvard graduates. Funding Societies operates in Indonesia under the name Modalku.
Recognised as Asia’s Top 25 Fintech Company by APAC CIO Outlook, Minterest intends to use a broad spectrum of innovative technologies and our team’s financial expertise to overcome existing real world financial shortcomings.
Founded in 2013, MoolahSense is a Singaporean P2P lending platform connecting local SMEs with investors. MoolahSense is backed by East Ventures and Pix Vine Capital and signed a partnership with DBS Bank to refer successful borrowers to the bank for larger loans and other traditional banking services. Funding Societies is the first Singaporean peer-to-peer lending company to incorporate a trustee registered with the Monetary Authority of Singapore (MAS).