ASEAN Fintech Landscape Evolves as Thailand Embraces Virtual Banking

 

The fintech landscape across ASEAN is experiencing significant transformation, with established hubs like Singapore and Indonesia continuing their rapid expansion whilst Thailand works to maintain its competitive position through strategic regulation and ecosystem development.

 

Speaking at a recent Money20/20 event, Scarlett Sieber, chief strategy and growth officer, acknowledged Thailand's regulatory efforts but pointed to Singapore's early leadership in establishing itself as a fintech hub through robust government partnerships.

 

"The significant presence of various Thai governing bodies at Money20/20 is a really great testament to Thailand's commitment," Sieber noted. 

 

She highlighted the increasing engagement of Thai regulators, including those from the insurance sector, at industry platforms as critical for progress.

 

Thai banks have dramatically increased their participation at fintech events, with representation nearly doubling at this year's Money20/20.

 

"We have not just Thai banks, but nearly 105 banks from across the region, with a lot more Thai banks here," Sieber observed.

 

The country's burgeoning startup scene was showcased through a pitch competition featuring 20 Thai companies with "global reach and global potential." 

 

 

Sieber emphasised that successful fintech ecosystems require all elements working together: regulation, established banks, fintech companies, emerging startups, and crucially, investment to fuel growth.
 

 

Despite this progress, Thailand faces stiff competition.

 

Elsy Li, Operating Member of SC Ventures, Standard Chartered's innovation and fintech investment arm, offered a nuanced perspective on the regional investment climate.

 

"There are reasons for optimism despite dampened confidence," Li stated. "Investors are increasingly targeting other regulatory-forward markets in Asia like India, which continues to attract robust overseas investor interest."

 

 

 

Li explained that Asia's fintech sector recorded a 10% increase in deal value in 2024 but is beginning 2025 with more cautious optimism.

 

"Investment committees are more cautious, waiting to better understand market dynamics before proceeding with deals. This is expected to lengthen deal timelines," she noted.

 

Despite these challenges, Li emphasised that certain opportunities remain resilient: "Deals considered transformational—particularly in the digital asset space—are still progressing. Investors with a long-term view and strategic goals continue to make moves, highlighting an underlying confidence in the sector's future."

 

 

 

Virtual Banking Takes Centre Stage in Thailand

Thailand's virtual banking landscape is poised for significant growth, supported by what industry leaders describe as a progressive and forward-thinking regulatory environment.

 

The issuance of new digital banking licences is acting as a catalyst for change in the Thai banking sector.

 

Mike Breen, chief commercial officer of audax Financial Technology, which has enabled new business models for Standard Chartered under the SC nexus proposition, pointed to Thailand's significant young population as a prime opportunity for digital banks.

 

"These demographic groups are better aligned with brands like Lazada and Line rather than longstanding banks," Breen explained.

 

He identified a critical opportunity in serving small and medium enterprises, which have been historically underserved by traditional banks.

 

"The digital banking model allows for innovative risk assessment and cost-effective service delivery, enabling banks to cater to this important segment," he added.

 

 

Virtual banks can operate with lower operational costs and more flexible structures that allow for quick adaptation and scaling of services, significantly reducing customer acquisition costs and making it possible to serve previously neglected markets.

 

However, Breen noted that established banks face a significant challenge in shifting their internal culture to embrace innovation, which often involves accepting failure as part of the process.

 

Financial institutions across Thailand are increasingly adopting advanced technologies like AI and cloud-native services to remain competitive. Data management and structuring are emerging as crucial factors for effectively leveraging AI capabilities.

 

 

Looking ahead, Sieber anticipates the continued rise of "super apps" across ASEAN and a move towards "customisation at scale," where mass adoption is coupled with highly personalised user experiences.

 

She identified open banking as an area where Asia still lags behind regions like Europe, suggesting "real opportunities in Asia more broadly for open banking and these different countries to come together to really push this forward."

 

 

 

Li reinforced this view from an investment perspective: "Fintech firms must aim for solutions that address global issues rather than being limited to regional challenges. Investors prefer products that can be scaled and have potential across multiple markets."

 

As Thailand positions itself within this evolving landscape, industry experts emphasise that success will depend on fostering a collaborative ecosystem where regulators, fintech firms, traditional and virtual banks, investors, and startups all work together to drive innovation and progress across the ASEAN region.