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

    Also watch on:

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

 

 

 

Search

View Past Sessions View all

Image
Beyond Banking: Creating Exceptional Customer Experience

This RadioFinance session will discuss how financial institutions can deliver a strong customer experience and how corresponding back-end capabilities can be a critical enabler.

Image
Incumbents accelerate technology spending to stave off digital challengers

Presenting key insights from the Excellence programme held in Hanoi in March 2023, Christian Kapfer, research director of TABInsights, identified personalisation, customer engagement, embedded finance and platform ecosystems as the key…

Image
Daniel Eidan of BIS: “Central banks and innovation can co-exist”

Inclusive innovation in central banking can enhance monetary and financial stability, according to Daniel Eidan, advisor and solution architect of BIS, speaking at the Excellence in Retail Financial Services Convention 2023

Image
Stojanovic of True Global Ventures: “Centralisation is dead”

Dusan Stojanovic, founder of True Global Ventures, caught up with Emmanuel Daniel, founder of The Asian Banker, to unpack how the recent banking crises in the US and Europe signal a shift towards decentralised assets and platforms

Image
US-China Craig Allen: “We want a level playing field for China’s private sector…

Craig Allen, president of the US-China Business Council (USCBC) met with The Asian Banker’s Emmanuel Daniel to discuss the impact of US-China trade tensions on foreign companies doing business in China, and anywhere in the world.