Connect with us
Compliance and ethics Training Asia-Pacific Bangkok regional

Banking

Thailand’s increasing mobile and internet banking payments transactions are credit positive for banks

Thai consumers’ rising preference for digital transactions is credit positive and demonstrates the initial success of Thai banks’ digital strategies

Avatar

Published

on

Last week, the Bank of Thailand (BOT) published data showing a surge in the use of mobile and internet banking in Thailand.

Thai consumers’ rising preference for digital transactions is credit positive and demonstrates the initial success of Thai banks’ digital strategies, which eventually will allow banks to rationalize their branch networks and improve cost efficiency.

Mobile banking transactions is increasing rapidly

Over time, the widespread use of digital banking channels also will allow banks to increase revenue by expanding their product offerings via digital banking channels beyond current transactional products.

The volume of internet and mobile banking transactions continues to expand at a rapid pace (see Exhibit 1) as both internet and mobile penetration improve in Thailand.

Mobile and internet banking accounted for 33% of total payment transaction volume for the first nine months of 2017, a marked increase from 8% in 2010.

In value terms, mobile and internet banking accounted for THB23.4 trillion in the first nine months of 2017, a 22% compounded annual increase in value since 2010.

Thailand’s banks’ increasing focus on digital strategies

Thailand’s increased usage of digital banking channels since 2015 reflects banks’ increasing focus on digital strategies.

Kasikornbank Public Company Limited (KBank, Baa1 stable, baa21 ) in 2014 began investing around THB480 million annually to enhance its digital banking services. As of year-end 2017, KBank had 7.3 million users on its mobile banking channel, recording around 3 billion transactions during the year, a tenfold increase from 2014.

This year, Bank of Ayudhya (BAY, Baa1 stable, ba1) said that it would invest THB20 billion to develop its technology infrastructure and digital banking platform.

Siam Commercial Bank Public Company Limited (SCB, Baa1 stable, baa2) last year planned to invest THB40 billion to enhance its digital banking capability. We expect the volume of digital banking channel transactions to continue increasing.

The shift to online transactions provides Thai banks an opportunity to rationalize their branch networks, thereby extracting operational cost efficiencies.

Exhibit 3 shows the number of commercial bank branches decreasing to 6,826 as of 30 September 2017 from a peak of 7,061 branches as of 30 December 2015.

Concomitantly, the banks’ annualized cost-to-income ratios declined to less than 52% as of the end of September 2017 from 54% in 2015. In January, SCB announced plans to reduce its traditional branches to 400 from 1,153 by 2020, while BAY said it will transform half of its traditional branches into digital or hybrid-digital platforms. BAY expects its investment in IT to result in a 10%-15% decline in operating costs over the next three years.

Rebaca Tan, Analyst, Financial Institutions Group, Moody’s Investors Service

0/5 (0 Reviews)
Advertisement Load WordPress Sites in as fast as 37ms!
Comments

Banking

How fintech is setting Southeast Asia’s SMEs free

In Southeast Asia, only 27% of adults have formal bank accounts and only 33% of businesses have access to proper financing

Avatar

Published

on


Around 1.7 billion people globally are still unbanked – either having no proper savings or access to credit – according to the 2017 Global Findex Database.

(more…)
0/5 (0 Reviews)
Continue Reading

Banking

BoT and PBC sign agreement on Fintech Collaboration

The two central banks aim to promote the use of innovation and technology to reduce costs and improve efficiency of financial products and services.

Avatar

Published

on

 ​On 9 June 2019 Mr. Veerathai Santiprabhob  Governor of the Bank of Thailand (BOT)  and Mr. Yi Gang Governor of the People’s Bank of China (PBC), signed a Fintech Co-operation Agreement in Fukuoka, Japan. 

(more…)
0/5 (0 Reviews)
Continue Reading

Banking

Asian real estate and US interest rates

Continued upward movements of US interest rates are starting to impact Asian real estate markets in a number of ways

Avatar

Published

on

Economic conditions in the US continue along a path of steady improvement, with the latest GDP growth rate of 4.1% (annualized), signifying the strongest rate of growth in four years.

(more…)
0/5 (0 Reviews)
Continue Reading
Advertisement

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 10,687 other subscribers

Upcoming Events

  1. ASEAN No Space For Waste: Health and the Environment Not For Sale

    June 18 @ 3:00 pm - 5:30 pm BMT
  2. Estonian Evening in Thailand

    June 18 @ 6:00 pm - 11:00 pm BMT
  3. Thailand Cyber Security 2019

    June 19 - June 20
  4. Compliance and ethics Training Asia-Pacific Bangkok regional

    Bangkok Thailand Regional Compliance & Ethics Conference

    July 12
  5. Singapore Basic Compliance & Ethics Academy Conference

    July 15 - July 18

Press Release

Most Read

Trending