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Thai Banks Using Digitisation to Evolve into Diverse Value-Driven Organisations

The Thai government is seizing opportunities that come from digital technology to improve citizens lives and to increase the country’s economic competitiveness regionally and globally. Through the nation’s ‘Thailand 4.0’ strategy which includes major investment into digital infrastructure, big data platform and analytics for education, healthcare and agriculture, as well as initiatives such as the Smart City project, the government is spearheading the country’s acceleration in digital transformation.

In 2017, the Thai government launched the ‘Village Broadband Internet’ scheme to expand the country’s high-speed internet network throughout the country allowing Thai people who live in remote areas to access broadband or high-speed Internet. Currently, all Thai villages can access high-speed internet networks, which allows users to access the government e-services as well as e-commerce and e-banking applications.

Thai citizens are one of the most digitally connected and engaged populations in the world

Thai citizens are one of the most digitally connected and engaged populations in the world according to the “Global Digital Report 2021”. The amount of time Thai internet users spend in front of a screen each day is above the global average and is the 9th highest in the world.

Thailand was ranked third in the world for e-commerce adoption and ranked fifth for using QR codes. The country also recorded the highest number of transactions through mobile banking and financial transaction apps in 2020, which could be partly attributed to the government’s digital co-payment scheme which is part of a relief package for those affected by the pandemic.

This in turn has put more pressure on the financial sector in Thailand to be digitally ready to meet demand and customer needs, but also to have the robust infrastructure in place with a strong data strategy to meet this demand. The traditional banking model has been significantly declining over the years due to the shift in consumer behaviour in the digital era and financial institutions due to their legacy infrastructure and risk-averse nature were perhaps not as fast as other sectors to digitise. The COVID-19 outbreak was a key factor in shifting the banking business landscape.

Outdated technology along with many structured and unstructured data sets meant limitation of scalability, and limitations on advanced data analytics which will could leave banks lagging in identifying marketplace opportunities and understanding customer needs. But in Thailand, many of its major banks have already embarked on a multi-year transformation journey to realise their full potential and take advantage of the opportunities of digitisation.

Thailand’s maturity in digital space points towards a successful future for the digital banking sector

Thailand’s digital infrastructure also puts the country at a significant advantage over other Asia Pacific nations, with extremely high smartphone ownership and internet usage. These factors are show Thailand’s maturity in the digital space, and point towards a successful future for the digital banking industry as a whole.

The Bank of Thailand has a three-year strategic plan (2020- 2022) with the theme – “Central Bank in a Transformative World”. Their aim is to ‘navigate the Bank of Thailands’s operations in a rapidly changing environment and to strengthen the resiliency of Thailand’s financial and economic system to meet the upcoming challenges as well as to help promote an inclusive and sustainable growth of the Thai economy.’

One of Thailand’s biggest banking transformations is Siam Commercial Bank’s reorganisation to become SCBX – transforming itself beyond being a traditional financial institution to being a compete financial technology group. Starting over 5 years ago, they have transformed the bank’s technology architecture and have also set up several tech-driven start-ups under the SCB Transformation Project. Their successes include SCB 10X, which has received $400m in tech investments and Purple Ventures’ “Robinhood” which is a food-delivery app now has over 2 million users and is expanding into non-food services.

Thailand’s banking and financial services landscape has undergone a major period of transformative change over the last few years, with more changes with many driven by the pandemic in the last two years than in the previous decade.

Bangkok Bank is accelerating its Digital Banking strategy with the continuous expansion of services to support digital lifestyles. Recently, the bank joined Counter Service Co. Ltd to add identity verification channels to open savings accounts through the ‘Be My ID’ service at more than 13,000 7-Eleven stores nationwide to support the growing demand for transactions via digital channels, while also increasing access to government relief measures and supporting Covid-19 control measures.

Krung Thai Bank has developed a platform and acted as rights protector for the “Rao Mai Ting Kan” which translates as the ‘No One Will Be Left Behind’ scheme, a project providing assistance to 15.3 million Thais during the COVID. The bank is also part of a campaign that generated cash flow in the economy of up to 20 billion baht. It played a key role in the “Khon La Khrueng” which means ‘Let’s Go Halves’ scheme which contributed to the economic recovery at the grassroots level, and also helped educate people on how to use technology (improving digital literacy) via the bank’s applications, “Pao Tang” and “Thung Ngern”. Thanks to its support for various government schemes, the bank can currently serve up to 40 million users.

The bank is keen on innovating and developing digital financial products and services in line with rapidly changing customer behaviour to increase its competitiveness. In particular, the new Krungthai NEXT application was developed with world-class technology and includes features that can support future financial activities. Pao Tang, an open banking application, can support digital services such as health care through the Health Wallet and Thailand’s first digital bond trading via the Wallet SBM.

Thai banks continually strategizing on how to use digitalisation to make better use of their data

Banks are in the unique position in that their data that can tell clients and partners the most important information sellers want to know– can the customer pay? This is extremely valuable and combined with the rest of the information banks hold about customers, such as  their demographics, spending patterns and preferences, it becomes even more valuable. Combine it with additional data from third-party systems, partners, and public sources and it becomes even more valuable still. All of this combined data can be used for additional intelligence and insights about customers which in turn is even more valuable again.

Banks will increasingly rely on data to understand the customer journey and to identify market trends. The banking industry is moving towards a more collaborative and open market focusing on data protection and minimising risk. Banks need to work on a strategy building strong foundations in data processes and customer experience, and this is where digitisation and advanced technologies such as AI, ML, cloud and blockchain will be key.

The banking and finance industry is on the brink of evolving into something completely different to what it was once traditionally known for in the past. In the digital and connected era, detailed and automated understanding of every customer, action and service will become the key condition for staying a value-driven organisation. And the Thai banking system already seems to understand this very well.

OpenGov Asia is hosting an invitation-only breakfast insight session with Splunk – ‘Driving The Future Of Thailand Financial Institutions Through Data.’ Click here for more information.

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