Thailand works to lay foundation for digital banking

Thailand is gearing up to establish independent digital banks in a bid to catch up with other Asian markets that are embracing digitisation in their banking services.

In an interview with Bloomberg, Veerathai Santiprabhob, governor of the Bank of Thailand said that as compared to countries where the digital banking system is better established, such as Singapore and Hong Kong, Thailand “might not have the ecosystem ready at this stage”.

According to him, the three key pillars that are needed to build digital banks are data from non-financial sources, an electronic identification system, and a suitable regulatory framework. Santiprabhob revealed that the Bank of Thailand is currently “working with various parties” to ensure that these three key pillars “reach international standards”. The governor also told Bloomberg that more digital banking services are needed in Thailand, and the bank is looking to introduce electronic lending and other financial services this year.

Quoting Santiprabhob, Bloomberg said it is crucial for more government agencies to collaborate with one another as the central bank cannot push this agenda alone. Meanwhile, he added that digitisation in Thailand is seen "as a way to spread banking services more widely as well as boost competition".

Although lacking in independent virtual banks, Thailand has access to various digital services offered by local and foreign lenders. Just early last year, Singapore-based United Overseas Bank launched its new mobile-only digital bank TMRW which boasts an in-app virtual chat assistant and gamification aspects. TMRW aims to attract the Millennial crowd in Thailand.

Closer to home in Singapore, the Monetary Authority of Singapore has recently confirmed that it has received a total of 21 applications for digital bank licences. According to MAS, it will issue up to two digital full bank licences and three digital wholesale bank licences. The digital bank licences will allow entities, including non-bank players, to conduct digital banking businesses in Singapore.