Virtual Banks: The Game Changer Set to Release Thais from Informal Debt
Digital lenders are poised to revolutionise financial access for vulnerable Thai households by leveraging AI and low operating costs to offer flexible, daily payment products
- Virtual banks are being launched in Thailand with the primary mission of tackling the nation's informal debt crisis by providing formal financial services to vulnerable populations.
- They will offer flexible and accessible products, such as loans and insurance with daily repayment options, specifically designed for individuals with irregular incomes.
- By leveraging AI and Alternative Data (like mobile phone usage) for credit analysis, these digital-only banks can serve customers without a traditional credit history and operate at a significantly lower cost.
The launch of Virtual Banks in Thailand is being hailed as a potential turning point for the national economy, with a key objective of freeing millions of Thai citizens from the grip of informal debt—a persistent social challenge.
The primary mission of these new digital-only institutions is to create pathways to formal financial services for the country’s most vulnerable people.
They plan to achieve this by introducing flexible and accessible financial products, such as loans and insurance, that allow for daily repayments—a crucial feature for those with irregular incomes.
Virtual Banks will rely heavily on cutting-edge technology, deploying AI and Alternative Data (such as mobile phone usage data) for credit analysis.
This digital-first model grants them a significant advantage: their operating costs are up to one-third lower than those of traditional high-street banks, allowing them to serve a wider customer base more efficiently and affordably.
The Vision: Finance for Social Good
Speaking at the "Thailand Economic Outlook 2026: Out of The Trap" seminar, hosted by Krungthep Turakij, leaders stressed that Virtual Banks are not simply a digitised version of existing services, but a tool for social mobility.
Punnamas Vichitkulwongsa, Chief Digital Platform Business Officer at SCBX Public Company Limited, outlined the "vision for social finance in Thailand," driven by the need to tackle the national informal debt crisis.
He noted that over 40% of Thai households are currently carrying off-the-books debt, averaging 54,000 baht per household, reflecting a failure of traditional institutions to achieve widespread financial inclusion.
Punnamas explained that the key differentiator is flexibility. Products can be designed for specific needs, such as offering accident insurance to motorcycle taxi drivers where the premium is paid 10 baht daily instead of a prohibitive monthly lump sum of 3,000 baht.
This approach, backed by AI analysis, also allows for the rewarding of customers who demonstrate good repayment discipline.
The Technology Advantage
Tanyapong Thanmavaranukupt, Co-President of Ascend Money Co., Ltd., reinforced the technological edge. He stated the absence of costly branches and legacy banking systems allows for superior cost management.
Crucially, their microservices architecture means new products can be developed in weeks, not months.
Ascend Money’s credit model will utilise Alternative Data, analysing expenditure patterns like mobile top-ups and app payments, to gauge a borrower's repayment capacity with greater speed and accuracy than conventional methods.
Tanyapong highlighted the scale of the challenge: while 95−97% of Thais have bank accounts, only 40% use digital payment services, and a staggering 96% lack wealth-generating investments or retirement savings.
The consensus among leaders was a shared understanding of risk. They noted that over 90% of digital banks globally have failed due to high system costs and poor risk management. Therefore, Thai Virtual Banks must prioritise robust risk management alongside their drive for financial inclusion to ensure a sustainable and compliant operation.
