Open competition, infrastructure and data key to sustainability in Thai digital economy

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Senior digital finance leaders who participated in the Finance Thailand Leadership Dialogue concluded that the successful repositioning of Thailand’s banking and financial sector to a sustainable digital economy will be anchored on banks' readiness to leverage open competition, infrastructure and data.

In 2022, the Bank of Thailand (BOT) received extensive feedback on its consultation paper calling for guidelines on achieving balance between growth and innovation in the finance sector amid the transition to a digital economy. In the paper, it highlighted that digital payments should not only transition Thailand to a ‘less cash’ society but also enhance the competitiveness of institutions and improve the quality of life of users.

During the dialogue, digital finance leaders recognised that the ability to connect and collaborate through customer-centric platforms and extract data to deliver personalised experiences is key to achieving a sustainable digital economy. However, unguarded expansion by platforms could exacerbate household debt and not serve consumers' long-term interest.

BOT assistant governor Tharith Panpiemras said during the dialogue that the regulator’s goal for this year is to enable open competition among incumbents and new players while strengthening the former. He also recognised the need to facilitate open infrastructure and address challenges in sharing data as the government prepares to open the application for digital banking licence.

Panpiemras explained that for new players to obtain a licence, they must show a solid business plan that can compete in the industry. He said: “They will have to prove to us that they can serve the underserved better than the traditional banks. Also, they must show that they can offer a more seamless experience to the customer. We expect to see them as a bank, not a fintech.”

In January 2023, Bank of Thailand (BOT) opened its Virtual Bank Licensing Framework for industry consultation. Once finalised, this framework will guide applicants on the requirements for obtaining a digital banking licence in Thailand. Release of the final licensing regulations and acceptance of applications is set to commence this year, BOT has said. Applicants approved by the Minister of Finance would be announced in 2024.

Key discussion points include:

  • Enabling open competition and strengthening incumbents
  • Facilitating open infrastructure and data for innovation
  • Challenges in accessing and sharing data, especially non-bank, alternative data
  • Competition and risk from new virtual banks and platforms
  • Balancing between customer centricity and channel economics
  • Developing a uniquely Thai path to digital success





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