SINGAPORE (Reuters) – Singapore’s central bank said it is studying whether to allow financial technology firms to operate digital-only banks in the city-state, as regulators in other Asian markets begin issuing virtual banking licences.

Singapore is among several financial centres in the region, such as Hong Kong, Seoul and Tokyo, pushing to become a fintech hotspot. Measures in recent years include state funding, light-touch regulation and moves to allow start-ups to test financial products in a controlled environment.

“Technology and other non-bank firms have been making large digital strides, and they have brought substantive value to their customers in doing so. Some of these non-bank firms have established digital-only banks, either amongst themselves or in partnership with incumbent banks,” the Monetary Authority of Singapore said in response to a query from Reuters on Tuesday.

“MAS is studying whether to admit such digital-only banks with non-bank parentage.”

Singapore, a major global financial services hub, is home to three locally listed banks – DBS Group Holdings Ltd, Oversea-Chinese Banking Corp Ltd and United Overseas Bank Ltd.

More than 200 banks have a presence in Singapore and a growing number have their operational headquarters in the city-state to service their regional group activities.

OCBC Group CEO Samuel Tsien cautioned against a one-size-fits-all approach by fintechs.

“With the rapid evolution of fintech over the past several years – where fintechs began as start-ups looking to disrupt financial institutions, to fintechs as eco-systems orchestrated by large technology companies – it is unavoidable that you will see digital-only banks without bank parentage wanting to operate here,” Tsien said in a statement.

“However, the operating model of such banks cannot be a one-size-fits-all regardless of the operating environment,” Tsien said, highlighting Singapore’s small domestic market, adding that almost every Singapore resident has access to banking services.

Singapore’s central bank said it has engaged relevant stakeholders to determine the value they bring to the local banking landscape and “understand how potential risks will be managed and contained.”

Hong Kong’s banking regulator this year issued so-called virtual banking licences to four companies including fintech firm WeLab Digital Limited. In South Korea, authorities have issued two online-only bank licences, one of them to Kakao Bank in 2017, which is operated by the company behind the country’s largest chat app.