Thailand energy conglomerate Gulf Energy Development Plc is teaming up with telecommunications powerhouse Advanced Info Service Plc (AIS) and the esteemed Krungthai Bank Plc (KTB) to enter the burgeoning field of virtual banking in the country.
According to a report by The Nation, this collaboration aims to secure a virtual bank license from the Bank of Thailand (BOT), with plans to invest an initial 5 billion baht ($138 million) in this innovative venture.
This announcement comes in the wake of the BOT’s decision to cap the issuance of virtual bank licenses to a mere three, a strategy intended to preserve the stability of the financial system as it adapts to the digital evolution of financial services.
Applicants keen on exploring this digital frontier have from March 20, 2024, to September 19, 2024, to submit their applications, with the BOT set to unveil the successful candidates in the first half of 2025.
Sarath Ratanavadi, Gulf’s CEO, expressed optimism about the joint venture’s potential, highlighting the consortium’s combined strengths: Gulf’s technological prowess, AIS’s vast customer base, and KTB’s financial acumen.
Ratanavadi anticipates that the BOT’s framework for virtual banks will enhance loan accessibility for Thais, offering reasonable interest rates while ensuring secure digital transactions.
Furthermore, the move towards digital banking is seen as a step towards leveraging technology, with plans for a new data center and expanded digital infrastructure on the horizon.
This venture into virtual banking aims to cater to clients seeking loans ranging from 10,000 baht to 100,000 baht, simplifying access to financial services.
The bid for virtual bank licenses has attracted notable participants, including the Charoen Pokphand Group through its fintech arm, True Money, in collaboration with partners like Ant Group. Suphachai Chearavanont, CEO of CP Group, emphasized the growing significance of technology in finance and the potential of a virtual bank license to broaden consumer outreach.
As Thailand witnesses a competitive race for these coveted licenses, with entities like SCB X Pcl also throwing their hats in the ring, the country’s banking landscape is poised for a digital transformation.
This move aligns with regional trends, as evidenced by Singapore and Malaysia’s issuance of digital bank licenses, underscoring the shift towards more accessible and technologically advanced banking services across Southeast Asia.