Thailand is moving closer to welcoming its first virtual banks, with the Bank of Thailand (BOT) currently accepting applications for the virtual banking license. With the deadline looming on the 19th of September 2024, speculations are rife for Thailand’s virtual banking license applicants.
In the initial phase, three licenses are expected to be granted, with successful applicants anticipated to be announced within the first half of 2025.
Once approved, these licensees will need to prepare extensively, including setting up IT systems and implementing risk management tools, to begin virtual banking operations within one year.
The BOT aims for these new digital players to enhance financial services through the use of technology and data, improve financial inclusion, and foster healthy competition.
So far, five consortia and firms, representing both Thai and regional business groups, have expressed interest in obtaining a license.
This article provides an overview of the five reported applicants for Thailand’s virtual banking license, highlighting their business activities, expertise, strengths, and aspirations for their proposed virtual banking ventures.
List of Thailand’s Virtual Banking Applicants So Far
SCBX, KakaoBank and WeBank consortium
SCBX, a Thai financial group, has formed a consortium with South Korea’s KakaoBank and WeBank to apply for a virtual bank license in Thailand.
The consortium aims to leverage advanced technology and their respective expertise to bring about new value propositions that extend financial services to the underbanked population and cultivate innovations that better serve the needs of each customer segment, focusing on transparency, accessibility and affordability.
SCBX is one of the largest financial groups in Thailand. It owns Thailand’s leading lender, Siam Commercial Bank (SCB), and was established to drive SCB’s transformation into a diversified financial technology group, focusing on innovations in digital banking, fintech, and other financial services.
Besides SCB, SCBX oversees a range of subsidiaries and ventures, including SCB 10X, a venture capital (VC) firm that invests in disruptive technology and startups; Monix, a fintech company specializing in digital lending and personal finance solutions; and CardX, a subsidiary focusing on credit card and payments solutions.
KakaoBank is a South Korean financial institution specializing in mobile banking services. The bank is affiliated with Kakao, a major tech company known for its popular messaging app KakaoTalk, and serves more than 23 million customers.
KakaoBank is the only digital bank in South Korea pursuing global expansion and is not only targeting growth in Thailand but also has a significant stake in Superbank, a digital bank in Indonesia that began operations in June 2024.
WeBank is China’s first digital-only bank, launched in 2014 by Tencent and other partners. The company operates primarily through mobile and online platforms, offering a wide range of financial services such as loans, deposits, and wealth management.
It leverages technologies like artificial intelligence (AI) and big data to serve underserved individuals and small businesses, and claims more than 350 million individual clients and 3.4 million micro, small and medium-sized enterprises (MSME) customers.
Charoen Pokphand Group and Ant Group consortium
Charoen Pokphand (CP) Group is planning to establish a virtual bank under its fintech arm, TrueMoney, a leading e-payment and financial services provider in Southeast Asia. CP Group aims to leverage its extensive retail network, including 7-Eleven convenience stores, to support the virtual bank’s operations, and will collaborate with Ant Group, an affiliate of China’s Alibaba Group. Ant Group is also a shareholder of CP’s Ascend Group, which owns TrueMoney.
Suphachai Chearavanont, chief executive of CP Group and board chairman of True Corporation, said in March that the group was in the process of preparing the necessary documents and ensuring readiness before applying for a virtual bank license.
He stated that the development of the virtual bank would be a collaborative effort, led by TrueMoney and supported by Ant Group, alongside CP Group’s retail channels, which could serve as touchpoints for the service.
Suphachai said the consortium was eager to establish the virtual bank to provide financial services to the unbanked population, while also enhancing its business portfolio. He did not specify a timeline for when the group would submit the license application.
CP Group is one of Thailand’s largest and most diversified conglomerates. The group is involved in finance and banking through its Ascend Money and TrueMoney subsidiaries.
Ascend Money provides financial services across Southeast Asia through a mobile app and a network of 88,000 registered agents. TrueMoney offers similar services to Ascend Money, such as mobile wallets and digital payment solutions, but with a particular emphasis on user-friendly experiences and expanding financial inclusion.
Ant Group is a leading Chinese fintech company renowned for its flagship product Alipay, a widely popular digital payment platform. The company is also involved in the digital banking landscape through its subsidiaries, MYBank in China, Ant Bank in Hong Kong, and Anext Bank in Singapore.
Gulf Energy, Krungthai Bank, Advanced Info Service, and PTT Oil and Retail Business Company consortium
Gulf Energy announced in March a partnership with Krungthai Bank (KTB), Advanced Info Service (AIS), and PTT Oil and Retail Business (PTTOR) to launch a virtual bank.
The consortium, which includes prominent companies in the energy, telecom and banking sectors, will form a joint venture and will apply for a license on September 12, KTB president Payong Srivanich confirmed to the Bangkok Post in August.
The consortium aims to leverage Gulf Energy’s technological expertise, AIS’s and PTT’s extensive customer bases, and KTB’s financial knowledge to create a successful virtual banking venture. KTB has a customer base of 40 million, a similar number to AIS, which means the alliance should have access to most customer groups in the country, as the nation’s population is 71 million, Payong said.
Payong highlighted the importance of virtual banking and technology in reducing costs related to physical branches and improving access to financial services for underserved groups.
“KTB has developed over the years to have capabilities similar to leading commercial banks. As a leader in the use of digital technology, data is important to stay competitive in the next era of generative artificial intelligence,” Payong said. “KTB’s strategic focus areas include data utilization, platform creation and inclusive growth. We need strategic partners to grow together.”
Gulf Energy is a leading Thai energy conglomerate, while PTTOR, a subsidiary of Thailand’s largest oil and gas company PTT Public Company, engages in the oil and retail business.
AIS is one of Thailand’s top mobile telecommunication services providers, and KTB is state-owned bank that’s owned for its extensive network of branches and ATMs across the country.
VGI Global Media
VGI Global Media, the advertising and financial services arm of BTS Group, recently expressed an interest in virtual banking through a partnership with a major local financial institution. Bangkok Bank (BBL), Thailand’s largest lender by total assets, and Jaymart, a retail company, are expected to be potential partners.
BBL president Chartsiri Sophonpanich recently refrained from commenting on the market’s expectations, noting that the bank is adopting digital services as customer expectations change. He said the bank is exploring opportunities in virtual banking as part of its transition to digital services.
In August, BTS Group approved VGI Global Media to raise capital through a private placement involving four investment funds. This move aims to support VGI Global Media’s expansion into various sectors, including virtual banking.
The company plans to use the funds to invest in virtual banking projects, either directly or through its subsidiary, and wants to partner with other organizations on this venture, holding no more than a 25% stake.
VGI Global Media believes its experience with Rabbit Card and Rabbit Cash and its expertise in integrating financial, data, and technological capabilities, along with the capital raise, will enhance its position in securing a virtual banking license.
VGI Global Media is primarily engaged in media and advertising but it also operates in the financial services industry through the Rabbit Card and Rabbit Cash. The Rabbit Card is a rechargeable contactless stored value smart card used to transfer electronic payments in systems in Thailand, while Rabbit Cash is a digital lending service platform.
SeaMoney Thailand
SeaMoney Thailand, a digital financial services provider under Singapore’s Sea, is reportedly seeking a virtual banking license, a source in the fintech industry told the Bangkok Post in August.
SeaMoney Thailand offers services like digital payments and lending services through ShopeePay and SPayLater. Its parent company, Sea, also runs MariBank, a digital bank in Singapore.
Sea is a tech conglomerate headquartered in Singapore. The firm operates across several major areas, including digital entertainment and gaming, e-commerce, and digital financial services through SeaMoney, a digital payment and financial services brand operating across the Southeast Asian region.
Featured image credit: edited from freepik
