Singapore Business Federation Digibank Bid Raises Questions
The Singapore Business Federation's announced bid for Singapore's digital banking license via a consortium has raised questions of impartiality and confidentiality amongst the business community.
Beyond, the name of the consortium of which the SBF is a member, has thrown in its application for Singapore's digital bank license, as finews.asia reported on Monday. However, some small and medium-sized enterprises (SMEs) are asking whether a chamber that is supposed to be impartial, should be taking sides in the digibank race.
«The SBF is taking a stake through which it can benefit businesses, but also itself... I'm keeping an open mind to see how it turns out, but I am not sure how SBF will not take sides if they are pitted against other members (in the digibank race),» said Jamie Lim, chief executive of furniture retailer Scanteak Singapore, who was quoted in «Business Times»(behind paywall).
Eligibility For Loans Affected?
Lim is not the only one concerned about SBF's role as a neutral party, given the profit-generating element to this venture by the federation. The director of Prime Structures Engineering, Julia Bensily, also expressed her concerns.
«I'm not sure if in the future, we need to be some 'gold member' (of SBF) to gain access to financing, or whether financing will be based on our exposure to SBF,» said Bensily. Having said that, if the SBF's consortium does end up helping SMEs like Prime with their financing needs, it would be «great», she noted.
All Singapore-registered companies with paid-up capital or authorized share capital of S$0.5 million and above have to be members of the SBF, to which they pay annual fees. While the federation has informed the Ministry of Trade and Industry (MTI) about its digital banking bid, the business decision by SBF is not endorsed or supported by MTI in any way.
Potential Issue
Another potential issue of SBF's finger in the digital banking pie is data confidentiality. The federation represents about 27,000 companies, as well as key local and foreign business chambers. Legal issues may arise would be if SBF misuses confidential information obtained from its members to run its business for unauthorized purposes, without these members' consent, legal practitioners noted.
However, SBF chief executive Ho Meng Kit stressed that the federation will not be sharing data freely with its digital banking consortium, especially members' confidential information. «We can release aggregated data, relevant data or data where consent has been given by our members,» he said.
Seat At The Table
Ho said that the federation joined the digital banking consortium as it wanted a «seat at the table» and to be able to influence the provision of financing solutions for its members. He acknowledged, however, that some SBF members are also providing financial services and products to SMEs, which could result in a conflict of interest.
Nevertheless, Ho is determined to «work with all financial institutions, both incumbents as well as new digital banks.»
