The development of technology and the wider Fintech sector is believed by many to be one of the biggest threats to traditional banks in many years and for a good reason. Moreover, the establishment of digital-only banks is often viewed as a potential threat and with easy availability of smartphones as well as cheaper data; it is only a logical conclusion. As far as innovation in the financial sector is concerned, Singapore is one of the most progressive countries in the world, and earlier on this year, the Monetary Authority of Singapore (MAS) decided to grant five such licenses. The MAS has started accepting applications already, and while many believe this would be a major challenge for Singapore\u2019s \u2018Big 3\u2019 banks, Fitch Ratings has stated that it is not the case.\r\n\r\nThe banks in question are OCBC Bank, UOB, and DBS Bank. In its report, Fitch stated that the three banks are firmly established in Singapore and are strengthening their capabilities on the digital front. In addition to that, Fitch believes that the regulatory authorities are not going to allow the sort of cut-throat competition that is going to destroy value. The role of the regulatory authorities in this regard will ensure that there is not a lot of erosion in market share for the \u2018Big 3\u2019. Fitch did state that it expects the digital banks to create a competitive market. The rating agency stated,\r\nWe expect the new entrants to increase competition in lending, particularly to more digital-savvy retail and SME customers, despite the regulatory restrictions.\r\nThe establishment of digital banks and the possibilities of launching in a mature economy like Singapore will see a lot of demand for the products that those banks have to offer. Consequently, many of the smaller banks might well suffer from the competition at hand. However, it is not going to be the same for the Big 3 as those banks have invested heavily in tech and are doing everything to launch a range of digital offerings. Fitch stated,\r\nHowever, we believe DBS, OCBC and UOB will remain disciplined, and they are also well-placed to compete digitally, having invested significantly in their digital capabilities in recent years.\r\nIt remains to be seen how the other banks react to the new challenge.