‘More work needed’ for fintech goals

The club, in cooperation with The Nation, presented the “Fintech Ecosystem and Stock Market for Start-ups” seminar last week. The event brought together hundreds at the Renaissance Bangkok Ratchaprasong Hotel to participate in a debate on the future of the financial-services sector. 
The government is creating an ecosystem to support fintech start-ups as part of its “Thailand 4.0” initiative. The panellists agreed that more must be done and there must be a “greater purpose” to align these efforts. 
Pipavin Sodprasert, Thailand country manager for Ant Financial, said Alibaba Group had created Alipay as a “trusted payment platform, where buyers and sellers on its B2C [business-to-consumer] and C2C [consumer-to-consumer] e-commerce platforms can transact with peace of mind, despite low credit-card penetration”.
As transactions grew and the trade data became available, Alibaba introduced data-driven financial products such as dynamic payment terms and loan and insurance products. These new products helped transform Alipay into Ant Financial. 
A similar evolutionary journey may be possible for Thailand. However, the path will be different as the financial ecosystem is at a different stage of development, and the needs of Thai consumers and businesses are different from those in China. 
Srihanath Lamsam, head of payments and the disruptive technology office at Siam Commercial Bank, believes that banks can provide trusted platforms, such as PromptPay, and in collaboration with fintech start-ups and other partners, can deliver unique value propositions to customers. 
Klairat Wattanavijarn of General Electronic Commerce Services, who has more than 10 years’ experience in enabling supply-chain financing services for large corporations such as PTT, CP All and Siam Cement Group, shared this view on the partnership model. His experience in the field saw the big companies and their suppliers work in partnership with local and international banks.
He said there were “blue ocean opportunities” for the introduction of supply-chain financing services to under-served suppliers that are small and medium-sized enterprises. They can benefit from the greater use of transactional data to lower restrictions on collateral requirement for easier access to working capital. 
In the case of China, he said Alibaba had joined with China Merchants Bank to offer loan products to sellers on its e-commerce platforms based on such data. 

Focus in Thailand 
In Thailand, e-commerce is growing but the focus needs to be on established trading communities that have digitised their trading documents, or are willing to do so. This covers the likes of purchase orders, invoices and payment collection notifications.
Veteran technology-industry leader Tom Kruesopon asked the panel whether Thai start-ups had been too focused on solving Thailand’s specific challenges, rather than on regional or global challenges. In response, Donnie Harinsut, chief operating officer and co-founder of Omise, said his Thai-based firm was offering payment-gateway services in Japan and Indonesia and had regional expansion plans. 
He said it was important for start-ups to focus unique value services. He cited Omise’s strategy in Japan of connecting Japanese businesses with Thai consumers, and vice versa. This drew on long-standing social and economic linkages between the two. 
Pipavin, agreeing with the need for a broader view, said almost 9 million Chinese travelled to Thailand each year, with around 4 million to 5 million of them using Alipay with local merchants.
As start-ups move from self-funding - or bootstrapping – to accepting funds from friends and family members and then from investors, Thailand is exploring new regulations and platforms to support the ecosystem. 
Tipsuda Thavaramara, deputy secretary-general of the Securities and Exchange Commission, cited the “sandbox platform” sponsored by the Stock Exchange of Thailand and the SEC for qualified investors and select start-ups to raise capital.
She said that while there were other options for peer-to-peer equity financing and debt financing in other countries, this was one direction that the regulatory and governing bodies in Thailand decided to take. This approach allows start-ups better access to capital and for investors to diversify their investment holdings.
The Wharton Club of Thailand regularly holds talks that are open to the public; see www.whartonthailand.com.