The Bank of Thailand (BoT) has stated that it will assess the applicants’ qualifications in several areas, including their financial status, to ensure that they are fit to operate in the digital banking sector. The approved digital banks will go through a “restricted phase” during their first years of operation.
Digital banking is not without its challenges. One of the biggest challenges is ensuring the security of customers’ personal and financial information. Digital banks must implement robust security measures to protect their customers’ information from cyberattacks, data breaches, and fraud.
This includes implementing anti-money laundering (AML) and know-your-customer (KYC) measures. This is crucial to prevent digital banks from being used for illegal activities, such as money laundering.
The BoT has stated that digital banks must comply with the same regulations as traditional commercial banks.
This includes regulations on customer protection, data privacy, and responsible lending practices. This is a positive step towards ensuring that digital banking is accessible and safe for all consumers, regardless of their financial status or background.
Additionally, digital banks must ensure that they provide fair and transparent services to their customers. They must ensure that their customers understand the terms and conditions of their services and that their customers’ rights and interests are protected.
Finally, digital banks must also ensure that they are financially sound and able to withstand economic shocks. This requires them to have a solid financial base, robust risk management systems, and a well-designed business model that is sustainable in the long term.
The Bank of Thailand has stated that it will assess the financial status of digital banks to ensure that they can operate safely and responsibly. This includes assessing their capital adequacy and liquidity position.
BoT has announced plans to issue three licenses for digital banks and is expected to announce the names of the approved licence holders in the middle of 2024.
Several firms have already expressed interest in entering the digital banking sector in Thailand, including SCB X, the holding company of Siam Commercial Bank, Super-app Grab, Singapore’s internet giant Sea, and partners telecom operator AIS and Krungthai Bank.
These companies have a significant presence in the region and have the financial resources and expertise to establish themselves as influential players in the digital banking sector.
In addition, Jay Mart, a SET-listed firm, has also expressed interest in entering the digital banking sector and has partners in the form of KB Financial Group, a South Korean financial service provider.
Digital banking can increase competition in the financial services sector, which can drive innovation and improve the quality of financial services.