BOT warns banks to gear up for disruptive technology
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COMMERCIal banks should not rely too heavily on fee-based income as disruptive technology becomes a more powerful factor, says Tongurai Limpiti, the Bank of Thailand’s deputy governor for financial institution stability.
Major and mid-sized banks have begun to be exposed to financial technology (fintech) in several ways. The BOT has eased regulations for banks that plan to invest directly in fintech and venture capital, but plans to make further changes to comply with this new landscape.
She said the banks should set up teams to study disruptive technology in order to look beyond fee-based income, as they could lose customers to non-banks once the latter can offer products that are safe and affordable.
The BOT and the banks are talking about new fee structures for mobile banking, which will be finalised in detail before the Any ID scheme is implemented on July 15.
In the first phase, fees for mobile banking will drop but those charged for ATM and branch services will be maintained. However, fees for cash withdrawals and transactions at bank branches will be increased in the future.
After Any ID is launched, she believes contactless mobile payments will be more in demand, and will be part of the new landscape of financial technology.
BOT will put contactless mobile payment into the fourth phase of its financial master plan. The central bank is currently involved in the third phase (2016-2020).
Tongurai said the Finance Ministry would open bidding for banks interested in installing electronic data capture (EDC) at government agencies nationwide. The terms of reference for this will be announced soon, and will be limited to only one or two banks.
To keep pace with the change, she said the BOT would review its code of conduct used to govern commercial banks, after seeing the rising search for yields which have promoted banks to introduce more wealth products to cater to this search by consumers.
Meanwhile, Tongurai said the zero interest rate announced briefly by TMB Bank on June 1 for its deposit accounts was a reflection of the picture of search for yield, believing its customers would accept a zero rate offset by free fees.
However, TMB had to reinstate the previous savings-deposit rate of 0.125 per cent per annum last Friday because customers were not ready for this change.
