Both companies have a considerable footprint across Asean. Grab is the dominant ride-hailing firm in every major Asean market but Indonesia (although it is certainly competing there) while Singtel is the region's biggest telecoms firm, with a strong presence in Indonesia, the Philippines and Thailand. Given the region's high degree of smartphone penetration, a significant portion of Asean's 655 million people are already both Singtel and Grab customers.
While Singtel's brand is strong, it has lagged as an innovator, The Economist pointed out in a recent commentary. Singtel's e-wallet Dash has not been a big hit. Grab could help out in that are with its GrabPay wallet and suite of digital services.
It is clear that Grab and Singtel have high hopes for their digital banking partnership. They applied for the digital full bank license, which allows holders to serve both retail and corporate customers, offer loans and take deposits.
The Monetary Authority of Singapore (MAS) has set the bar high for digital full bank licenses. It will issue a maximum of two. For the licenses, "MAS will only consider applicants who are anchored in Singapore, controlled by Singaporeans and headquartered in Singapore," the regulator said in a statement on its website.
Further, DFB applicants "must include commitment of funds or concrete fundraising plans to meet the minimum paid-up capital of S$1.5 billion required when the DFB becomes a full functioning DFB," the MAS said, adding that it expects that process to take three to five years from the time the business is launched.
In a statement, Grab and Singtel said that their digital bank will focus on catering to customers who prefer banking online and want more personalized services, as well as small and medium-sized firms which often struggle to access credit.