Singapore is changing its regulations to make it easier for banks to move into non-financial but complementary business areas such as e-commerce.
In a speech, Singapore's finance minister Heng Swee Keat said that rules introduced in 2001 to ensure banks focused on their core competencies are no longer as relevant.
"Banks are facing increasing competition from online and non-financial players that have leveraged their large user base to provide digital wallets, payments and remittance services," he noted.
Meanwhile, the rise of online and mobile banking has opened up the possibilities for banks to deliver value-added services to customers.
To help them take advantage of this, the Monetary Authority of Singapore (MAS) will streamline regulatory requirements for banks seeking to conduct or invest in permissible non-financial businesses that are related or complementary to their core operations.
This means the banks will no longer need to seek prior regulatory approval before carrying out non-core business or buying major stakes in firms that do.
In addition, MAS will allow banks to operate digital platforms that match buyers and sellers of consumer goods or services, as well as to conduct the online sale of such goods or services - as long as they are related or complementary to banks’ core financial businesses.
The speech came as seven Singapore banks gear up to launch a peer-to-peer money transfer service called PayNow, enabling customers to send funds between bank accounts using just their phone numbers, almost instantly.