Krungsri Consumer boosting digital services, lending to expand reach
Amid global economic recession and rising inflation, the financial industry is undergoing a digital transition affecting both strategy and services. Krungsri Consumer, Thailand’s leading credit card and personal loan operator, is also planning digital-friendly changes to its organisation and services.
Nayanee Peaugkham, Chairwoman of Krungsri Consumer, told Krungthep Turakij newspaper that the company will boost its competitiveness over the next three years using five strategies: Providing financial products and services for modern lifestyles, using the latest innovations to increase productivity, building a digital finance ecosystem with partners, finding new sources of income, and ensuring personnel are ready for modern world.
Digital trend in financial products
“Due to Covid-19, more consumers are shifting to digital services, as shown by Krungsri Consumer’s credit card spending in early 2022 with year-on-year growth of 19 percent for online shopping and 72 percent for food delivery via apps,” said Nayanee. “Hence, Krungsri Consumer aims to enhance our service by offering attractive promotions to boost online spending, and improve our digital services to facilitate the rising number of digital channel users. We are also emphasising data analysis to identify consumer needs and develop products and services that respond to their changing lifestyle.”
Nayanee added that the company’s XU virtual credit card registered spending of over 44 million baht from February-May 2022, while the Krungsri Now credit card saw 300 million baht in spending from November 2021-March 2022 among 25,000 cardholders. Meanwhile, the UCASH digital lending service on the company’s UCHOOSE app recorded 29.5 billion baht in lending from over 3.69 million transactions between June 2021 and May 2022. “This indicates that the trend for digital financial services is rising, and consumers are responding positively to our new products,” she said.
Building digital ecosystem
“Krungsri Consumer is investing to develop a digital ecosystem in preparation for rising competition in the next three years,” said Nayanee. “We are using data analysis systems to understand consumers’ behaviour and design products and services that can better serve their needs. We also use AI (Artificial Intelligence) in new marketing campaigns and employ RPA (Robotic Process Automation) in our work process to increase efficiency.”
Nayanee added that the company’s UCHOOSE app can gather customers’ data and analyse their preferences to select suitable products and services to promote. “The application not only allows customers to easily access our latest products and services via mobile application, but also offers convenient card application process via digital channels. It also helps facilitate our business partners to offer special deals on their products, as well as installment plan on selected items, providing more options to customers.” she said. “Apart from UCHOOSE app, consumers can also access our latest products and services conveniently via new digital channels such as Line official account, and Facebook.”
Besides building a digital ecosystem for its business, Krungsri Consumer is also cooperating with other business units under Bank of Ayudhya under the policy of “Krungsri One Retail”, in which different units are encouraged to work together to develop better products and services for customers. “We are also committed to expanding our consumer finance business to other markets in the region such as Laos, Cambodia, the Philippines, and Vietnam after the bank recently acquired SHB Finance ,” she added.
Seeking more partners in digital lending
For the second half of this year, Nayanee said the company is planning to launch more digital lending services with several partners, aiming to increase access to personal loan for customers in wider groups.
“We believe that digital lending will be the key business opportunity for Krungsri Consumer in the second half of 2022, with estimated turnover from digital lending at 50 percent of total lending within the next three years,” she said. “As the Covid-19 situation is improving, people will need cash to increase their liquidity for economic activities, so we will be providing loan services that are fast and convenient for all. Krungsri Consumer is also planning to launch the ‘Buy Now Pay Later’ service via the application by year-end, which will offer even more choices for hire purchase consumers.”
As for finding new sources of income, Nayanee said that Krungsri Consumer plans to explore areas in which it already has expertise, such as debt collection, to create a service with a help of new business partners, also expected to be launched later this year.
Reopening Thailand will fuel credit card, lending expansion
“Rising inflation and global oil prices could limit Thai people’s spending in the rest of the year, but we are still confident that the reopening of the country after over two years of Covid-19 shutdown will attract foreign tourists and boost Thailand’s economy,” said Nayanee. “Since the relaxation of Covid-19 restrictions, credit card spending has increased continually. In the first five months of 2022, Krungsri Consumer recorded a 12 percent increase year on year in credit card spending and a 14 percent increase in new loans. Food delivery, online shopping and inter-spending are among the categories with significant growth.”
Meanwhile, non-performing loans (NPL) are at 1.1 percent for credit card loans and 2.5 percent for personal loans, which are lower than the loan business average.
“For 2022, Krungsri Consumer is targeting 312.3 billion baht in credit card spending, or a 10 percent rise , and 84.6 billion baht in new loans, or 11 percent increase, compared to prior year. Total outstanding loans will be at 149.6 billion baht, increasing 7 percent year on year,” added Nayanee.
