Although it remains a top contender for a Singapore digital full bank license, which allows the holder to provide both retail and non-retail banking services, Grab seems intent on building a fintech ecosystem that can thrive even in the absence of the license. In a recent interview with EuroMoney, Grab Financial Group's senior managing director Reuben Lai spoke of the company's "open ecosystem approach. We really rely on our partners to jointly create products with us.”
By employing such a strategy, all will not be lost for Grab's digital banking aspirations if the MAS rejects its application. On the other hand, if Grab wins the license, it will be in an ideal position to offer a large suite of banking services to customers in Singapore and beyond. Grab currently has to jump through many regulatory hoops to act as a digital bank in all but name.
Meanwhile, Grab is already tapping demand for digital banking in Southeast Asia's key markets. In Indonesia, Grab and its e-wallet partner Ovo had about 400,000 loans and financing solutions on their books in the first quarter of the year, according to The Business Times. In Thailand and Vietnam, Grab is using MUFG's $850 million investment to launch new products.
The Singapore digital bank license just might make it easier to establish bonafide digibanks in other key Southeast Asian markets. It's a tried-and-true path: Incumbent Singaporean banks like OCBC, UOB and DBS began in the city-state before expanding regionally.
Like many cash-rich unicorns, Grab does not espouse a focus on profitability. Lai told EuroMoney, "We don't have a timeline to profitability," perhaps reflecting Grab's deep-pocketed backers confidence in the company's long-term prospects, loss-making ride-hailing business or not. This ethos is reenforced every time Grab raises another massive sum, most recently US$200 million from Seoul-based private-equity firm Stic Investments in August.
In total, Grab has raised US$10.5 billion and is valued at more than US$14 billion.
Ultimately, in addition to all that cash, Grab has a lot of users, but its app isn't that sticky without a popular messaging or e-commerce service. WhatsApp Pay and Gojek, because of its Facebook partnership, are better poised to make the super app play, and become fintech giants in the process.
It will be very interesting to see where the exit ramp is for Grab and its backers, especially given the company's relaxed attitude towards profitability.