By Asina Pornwasin
Fintech would enable the 40 per cent of unbanked or underserved Thais to get access to formal financial and banking services, according to panellists at the “Thailand Economic Monitor, Harnessing Fintech for Financial Inclusion” seminar. The unbanked segment in Thailand is currently prey to loan sharks in an informal lending sector that is driving a crisis in household debt, which has reached an alarmingly high level of 78 per cent of GDP.
Somprawin Manprasert, head of Krungsri Research, said that fintech was helping financial institutes offer effective banking services in the digital era. As the world moves to online platforms, banks are following suit. Banking services will be transformed by innovations, including information-based lending ecosystems incorporating existing and new data and digital footprint; both hard and soft infrastructure – such as regulation and trust; online platforms; and products personalised according to risks, returns and profiles of individual customers.
“Financial institutes and banks will become ‘data companies’," said Somprawin.
The future will also bring more partnerships both among banks and between banks and non-banks. Banking will be the transaction-facilitator for consumers.
"Fintech helps identify consumers and also helps banks to access information, both existing and new data, at lower cost. With banks better able to ‘see’ consumers’ information, they can expand services to unbanked and underserved people," said Somprawin.
Pipavin Sodprasert, Thailand country manager for Alibaba’s Ant Financial (Alipay), said that digital technology is spreading financial services in three ways. It is connecting people to financial institutes, complementing existing services, and catalysing banking outreach to the financially underserved. Ant Financial sees itself as a catalyst, with a mission to reach out to the globe’s 1.7 billion unbanked adults. The company is focusing on blockchain as the cornerstone of secure digital banking of the future.
"Around 40 per cent of our staff are focusing on security, "said Pipavin.
Thammarak Moenjak, director at the Bank of Thailand’s Financial Institutions Strategy Department, agreed that fintech helps people access informal financial services at lower cost and reduced risk. Fintech aids productivity, inclusivity and immunity of financial and banking services, he added.
The seminar panel also unveiled other financial innovations, such as virtual banking in Hong Kong and evolving collaborations between banks and partners to reach new consumers. Panellists said the challenge now would be to facilitate sharing of payments and other data across the various models of fintech, adding that technology infrastructure was an important factor in achieving success here.