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Jack Ma's Shadow Looms Large for Banks Across Southeast Asia

  • Ma’s Ant Financial is signing up partnerships in region
  • Estimated 450 million people lack access to banking services

Over the past two months, some 1,000 part-time workers for DBS Group Holdings Ltd. have fanned out across Singapore’s famed food courts, trying to entice mom-and-pop hawkers to use the bank’s digital payments service, called PayLah!

“Hawkers need speed, and they are afraid that using PayLah! may not be fast enough when the queues are very, very long,” 19-year-old Erica Chiang, who has signed up 50 food vendors in her seven weeks working for DBS, said on a sweltering Wednesday afternoon. “Once they know the product, they become interested."

Jack Ma Photographer: Jeff Kowalsky/Bloomberg

Chiang is on the front lines of a push consuming banks across Southeast Asia these days: defending against Jack Ma’s Alibaba Group Holding Ltd. and its payments affiliate Ant Financial, which are targeting the region as a major growth market.

Southeast Asia’s banks have long been spared the competitive onslaught that saw their peers in China cede that nation’s giant payments market to Ant Financial and Tencent Holdings Ltd. That’s about to change, as Ma lines up partnerships across the region to win over some of the estimated 450 million people with limited access to banking services -- and then use that position to go after the lenders’ core customers.

“We view the ‘Big Techs’ with large platforms as the ones we should be more concerned with,” said Sandeep Lal, head of digital banking at DBS.

Government Help

Underscoring the perceived threat, Singapore’s government on Tuesday proposed new rules to make it easier for banks to invest in non-financial businesses, including e-commerce and digital-payment platforms. In announcing the move, Finance Minister Heng...