The Bank of Thailand published a consultation paper on Virtual Bank Licensing Framework to introduce digital banks as a new financial service provider.
Thai regulators are set to allow the country’s first digital banks to offer services to boost competition, cut costs for businesses and individuals, and widen loan access in 2025.
The Bank of Thailand (BoT) plans to issue up to three virtual banking licences in the first stage of its digital plans, allowing financial institutions and non-financial firms to apply.
While the applications are open in quarter one of 2023, ten parties have expressed an interest in applying for the permits, with applications opening later this quarter.
The applicants must first submit their business models and feasibility studies to the BoT for review and consideration, which will take six months before submitting the names to the Finance Ministry, taking an additional three months of consideration. Many banks are eager to apply for the license to explore more significant business opportunities. One such bank is Krungthai Bank (KTB), which has partnered with Advanced Info Service (AIS) to invest in a digital bank to serve existing and new customers.
However, all qualified applicants must meet specific requirements and possess the technology, digital services, and data analytics expertise.
Digital banks are to offer financial services with new value propositions through digital channels while lowering staff and bank branch costs.
This recent move is seen to contribute to the expansion of Thailand’s economy and provide underserved customers who traditional banks currently underserve with access to financial services at reduced prices.
Digital banks can provide a broader range of services and products and reach new customer segments. Ultimately, this will benefit all customers through enhanced competition and increased choice.