It seems like the worlds of social media and banking are set to collide in the near future. This comes from a report dated June 16, 2020, which states that ByteDance is in talks with the Singaporean Lee business family to secure a banking license. ByteDance is better known as the parent company of TikTok, the popular social media app.
ByteDance Expanding its Reach Beyond TikTok
The company is reportedly trying to secure a digital banking license in Singapore to begin operations. Beyond this, they are also trying to get a tie-in with an investment group that is connected to the Lee family. The report cites sources close to the situation.
ByteDance has already found great success with TikTok, but this new move is evidence that they wish to expand their efforts. By the end of the year, the Singaporean Monetary Authority intends to issue five digital banking licenses, one of which ByteDance hopes to secure. However, they will be competing with other prominent firms such as Alibaba.
A partnership with the Lee family would certainly be a boost not just for ByteDance but for any company looking to operate in Singapore. They are the country’s most notable business families, holding a stake in OCBC Bank, which is South-East Asia’s second-biggest bank by assets. Besides the bank, the family also owns a number of businesses, such as the Lee Rubber Group.
ByteDance, on its part, has been making active moves to enter the digital banking sector for a while now. In their native country of China, the market is already dominated by giants such as Alibaba and Tencent. Instead, they seem to be moving towards emerging markets where there is less saturation.
Previously, they had applied for a digital banking license in Hong Kong. Within Singapore, they have applied for a wholesale bank license. This license would allow them only to serve corporate entities such as medium scale businesses.
ByteDance Has Seen Remarkable Growth in Recent Times
While the company is actively trying to enter the digital banking sector, it has already seen success in recent times. In 2019, they reported revenue of $17 billion, making them one of the world’s most valuable startups. This was more than double the figure brought in during 2018.
This success has also allowed the company to face competitors head-on in the entertainment sector. According to sources close to the matter, advertisers from competitors such as Tencent Holdings Ltd. and Baidu Inc have switched to ByteDance. They were also able to poach Kevin Mayer away from Disney to become the CEO of TikTok.
Thanks to their almost 1.5 billion monthly active users on TikTok, ByteDance has been able to crack the international market. They are reported to be able to fetch between $150 billion and $180 billion in valuation in an initial public offering. Furthermore, they have reported advertising revenue on track to rival those of internet giants like Google and Facebook.
As of now, the company has around 60,000 employees, most of whom are based in China. In America, the company’s employees have risen to 1,000 in 2020. This is compared to the 300 that they had in 2019.
Singapore Becomes Hub of FinTech Activity
It is not surprising that ByteDance has targeted the Singapore market for its expansion into digital banking. This is because the country is fast establishing itself as a go-to for fintech development. Through regulatory development and support for products in the industry, such as security tokens, have taken place within the Singaporean fintech sector.
In September 2019, it was announced that the Monetary Authority of Singapore would be introducing new regulations. This regulation would provide clear guidelines for cryptocurrency exchanges in the country. As a result, exchanges could be better regulated, and adoption could be increased.
This month, the Singapore FinTech Association announced that a new self-assessment initiative would be put in place. The mechanism would allow fintech firms to demonstrate their compliance with banks. This, in turn, would help speed up partnerships between fintech firms and banks in Singapore.
Do you think ByteDance should enter the digital market sector? Can they recreate their previous success with TikTok? Let us know your thoughts below.