It is no surprise that Singapore has been seeing a surge of non-banking institutions applying for a full digital banking license over the past few weeks. With strong law enforcement and transparency in the process, the city-state makes a great choice for entrepreneurs to set up their companies in.
However, in an interview with e27, Gleb Shabanov, founder of Singapore-based Kubia, explains why he is not keen on joining the others in the race … just yet.
Instead, the company opted to stay under Major Payment Institution (MPI) regulations.
According to Shabanov, by not applying for the digital banking license today, Kubia –which dubbed itself as a digital alternative to conventional banks– will actually have greater opportunity to compete and win the market.
“After the MAS gives out the results, there is actually a two-year process to set up the operations, the infrastructure, and help the selected companies to establish their business processes,” says Shabanov.
“So according to the guidelines, in the year 2020 and 2021, they are going to establish the framework and enable the companies to test their products around that time,” he adds.
The time that the digital banking licensees take to set up their business will give Kubia plenty of opportunity to grow its own offerings –and potentially, stay ahead of the competition.
“The [two-year] period will actually give us room to improve the product and grow the community around us,” he stresses.
“As the operations are set up during that due time, it will help us understand the principles and basics much better and will be easier for us to recognise the process for licensing.”
Launched in 2018, Kubia combines traditional banking services such as prepaid cards and inter client transfers with affordable remittances.
Additionally, the bank allows customers to open an account with no minimum deposit or additional admin fees. It also provides customers with real bank current accounts and current accounts for corporates.
Can new names compete against bigger names?
Even as the company wait to get a better view of the fintech scene after the announcement of full digital banking licenses, how do they plan to acquire users as a new bank?
Shabanov holds the view that at this time, it is important for Kubia to be more focussed on the development of the user experience and build a strong product, rather than focus on the legalities of forming a fully licensed digital banking community. The investment-banker-turned-entrepreneur aims to focus on building a transparent and customer-centric product.
“We are very consumer-focused. We want to be focused on the product first. You can work a lot on legal and forget about the project. There are examples of companies who spend too much time on legal matters and forget about the product. We want to integrate the best product which is amazing for the customers, and when we get mass adoption it will be easier for us to get further licenses. I would like to be as open with the customers as possible,” he elaborates.
The digital bank has already run its beta test from July to September 2019, which involved users testing the card programme, remittances, P2P transfers, and top-ups.
The founder also discloses plans to launch in the UAE.
Shabanov expresses that the UAE market for remittances is still yet to be tapped into but currently continues to maintain a strong focus in the Singapore market for now.
–
Image Credit: Kubia
The post Why Kubia is not in a rush to apply for Singapore’s digital bank license appeared first on e27.