Singapore is becoming a haven for e-commerce companies looking to get into banking in Asian markets.

In 2019, the Monetary Authority of Singapore announced it would issue three digital wholesale bank licenses and two digital full bank licenses, challenging Singapore’s legacy financial institutions, CNBC reported. The regulator’s moves have created an opening for super apps to move into banking.

Recent proposed entrants into the banking sector include super app Grab Holdings and leading communications company Singtel, which have announced a partnership to apply for a full digital banking license in the city-state. While a full digital banking license requires both companies to be headquartered in Singapore, wholesale banks can be controlled by foreign entities or Singaporeans.

In the past two years, Grab has launched and scaled a number of financial services, including lending and insurance distribution throughout Southeast Asia. While it currently operates in Singapore, it sees a Singapore banking license as a new step in the evolution of its product offerings there.

“The natural next step is to build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable,” said Reuben Lai, senior managing director at Grab Financial Group, in a statement.

Meanwhile, Singtel sees the partnership as a path to transition from mobile to financial services.

See also: Singapore to speed up its fintech patent-granting process

“The digital banking space is a natural extension of the mobile financial services that we are already offering to our large base of customers,” said Arthur Lang, CEO of Singtel International Group, in a statement. “We want to fundamentally change the way consumers and enterprises bank.”

Zhi-Ying Barry, senior analyst at Forrester, explained that some companies have seen the Singapore banking license as a gateway to other countries in the region, including Thailand, Vietnam and Malaysia. She also noted the Singaporean government wants to use the interest from companies to encourage creativity in its banking space and has also shown openness to the growth of other fintech companies, including blockchain startups.

There’s a push “There’s a push to make Singapore a financial hub, and the Monetary authority of Singapore is coming up with different types of frameworks,” she said. “They have sandboxes to help to encourage fintech, not just for consumers but for corporate institutions as well.”

As of this month, Singapore had received more than 20 applications from several businesses for the five digital bank licenses currently available. Regulators will announce its decision on which companies will be granted banking licenses in June 2020.

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