The companies are set to form a consortium where Grab said it will own a 60% stake, with Singtel holding the remaining 40%.

Their target market would be digital-first users and small and medium-sized businesses who say they struggle to access credit, Grab said.

Ride-hailing company Grab said Monday it will team up with one of Singapore’s major telecommunication services providers, Singtel, to apply for a digital full bank license in the country.

The companies are set to form a consortium where Grab will own a 60% stake and Singtel will hold the remaining 40%, according to a joint statement.

Their target market would be digital-first users and small and medium-sized businesses who say they struggle to access credit, Grab and Singtel said.

While ride-hailing remains the main business for Grab, the start-up has branched into a number of other areas. Since launching its GrabPay e-wallet in 2016, the company has also rolled out a number of financial services across Southeast Asia, including insurance plans for its drivers. It is also present in the region’s highly competitive food delivery market.

“In the past two years, we have launched and scaled financial services such as e-money, lending and insurance distribution into Southeast Asia’s largest fintech ecosystem,” Reuben Lai, senior managing director at Grab Financial Group, said in a statement. The “natural next step” is to build a digital bank, Lai added.

For its part, Singtel is moving beyond its traditional mobile carrier services into areas such as digital payments, with its Dash mobile wallet, and cybersecurity.

Singapore’s financial regulator, the Monetary Authority of Singapore, said in June that up to five new digital bank licenses will be issued in the country -those include two digital full bank licenses that would allow non-banking entities such as Grab and Singtel to take deposits from retail customers.

MAS, which is also the country’s central bank, is also planning to issue up to three digital wholesale bank licenses for companies to serve small and medium-sized businesses and other non-retail segments.

In September, MAS said it was accepting applications till the end of 2019. Industry watchers commented that the presence of digital banks could be beneficial for customers, in terms of having more choices.

Singapore’s banking sector is dominated by three major banks -DBS Group, Oversea-Chinese Banking Corp, and United Overseas Bank. A number of international banks with comparatively smaller operations are also present.