A Singaporean-led consortium is the latest to apply for one of three wholesale bank licenses up for grabs in Singapore.
Hong Kong-listed Sheng Ye Capital, a supply chain finance company founded by Singaporean Jeff Tung, has partnered with financial conglomerate PhillipCapital, and fintech Advance.AI to bid for a wholesale banking license in Singapore. The consortium aims to build a data-driven bank that will help small-medium-enterprises (SMEs) grow and expand into Asia.
«Our mission has been to leverage technology to reshape traditional supply chain finance and address SMEs' challenge of financing,» said Jeff Tung, who quoted in «The Business Times» (behind paywall). As the consortium lead, Sheng Ye Capital aims to tap on its experience partnering SMEs to create a «profitable and sustainable» digital bank.
Led By Singaporeans
All three consortium members are owned or led by Singaporeans, compared with other Chinese wholesale banking applicants that have raised their hands for the license, such as Ant Financial and ByteDance. Among the trio, Sheng Ye Capital and Advance.AI are backed by Temasek subsidiary Pavilion Capital.
The digital wholesale bank license - which allows the successful licensee to serve SMEs and other non-retail segments - requires a capital requirement of S$100 million and allows foreign entities to take a majority stake.
Initial Focus
In the beginning, the Sheng Ye Capital-led consortium aims to focus on SME segments which they consider to be «severe» in their lack of funding by incumbent lenders. Sheng Ye Capital's businesses are mostly in China, but it has originated more than US$6 billion worth of loans serving SMEs there in the past five years.
Besides leveraging on the proprietary technology architecture of Sheng Ye Capital, the consortium can tap on Advance.AI's technological capabilities. The fintech taps on Big Data and artificial intelligence (AI) for fraud detection and credit scoring, serving over 400 enterprises - mostly financial institutions and fintechs.
The Next Level
Consortium member PhillipCapital is taking a leap into digital banking as a way to get the financial conglomerate to «the next level». It is a «natural extension» for the group to further provide financial services to SMEs, after decades of helping individuals and institutions with their investments, said Linus Lim, director and co-chief investment officer at PhillipCapital.
«A sizeable proportion of our clientele today are SME owners, who trust us with their personal financial assets. We have received inbound queries to also offer financial solutions to their SMEs and see this new initiative as a direct extension to better serve our clients,» explained Lim. The group is already assisting SMEs with hedging volatility, financing and earning a better return on their assets, he added.
