SCB mulls partnerships to boost units

The bank has four subsidiaries under the SCB Group umbrella: SCB Securities, SCB Asset Management, SCB Life Assurance and Digital Venture – the latter being its venture-capital arm and laboratory for start-ups and financial technology (fintech).
Arthid stressed, however, that the partnership solution did not mean the bank would walk away from these businesses, but SCB’s policy was to focus on delivering the financial services that customers want.
He raised the example of wealth-management business, in which he said SCB should have a global partnership in order to provide know-how and world-class investment products.
“SME [small and medium-sized enterprise] customers with a lot of money may want to invest in world-class products, and we should not leave them to move their wealth out of our portfolio, but should help them [to invest].
“Doing business by ourselves in the future is not the way to go. We should integrate platforms from partnerships in all businesses, by finding solutions via partners, acquisitions or our own development – and making the right combinations,” the CEO explained.
Asked whether the partnership solution might involve a trade-off through the sale of shares in SCB’s subsidiaries, Arthid replied that if the bank decided to do anything in this regard, he would talk publicly about the details, but he insisted SCB right now was making no move to sell stakes in its subsidiaries.
This includes the rumour that the bank is considering selling its stake in SCB Life Assurance, he added.
Turning to Digital Venture, a wholly owned subsidiary, Arthid said SCB had set up the unit to test ideas and technology that would enable it to get ahead of the market and, even though the company might not make a profit, it would not impact on the bank’s earnings.
SCB is allocating 1.5 per cent of its net profit, or around Bt500 million, a year to undertake lab work exploring digital and other new technology, in order to provide new a financial experience for customers.
It has also set aside US$50 million (Bt1.74 billion) as a venture-capital fund for fintech start-ups.
Digital Venture will initially be investing in one or two fintech start-ups through a fund of funds at a cost of $5 million-Bt10 million, with the investment sum having been approved by the Bank of Thailand, he said.
“While the upcoming investment is not expected to provide a [financial] return to the bank, we hope it will introduce us to new technologies from fintech, which is the latter part of the start-up system.
“We are interested in blockchain technology, which contributes to cross-border payments by reducing the time taken for such payment from one day to real time, which will improve the cost-effectiveness of cross-border payments,” Arthid said.
“The bank must make itself attractive for fintech, and encourage developers to propose their technology proposals to us. We have therefore set up a venture-capital fund to attract fintech or tech- based start-ups. Without venture capital, we possibly wouldn’t have the opportunity to see [new technologies] before our rivals do, and would still follow what others do first,” he explained.