BANGKOK -- In Thailand, telecommunication giants form a pillar of its startup ecosystem. They had to seek next-generation technologies when the transition to smartphone hit the country a decade ago.
Partly threatened by digital disruption brought by tech companies, banks have become another pillar of the Southeast Asian country’s innovation drive.
“In China, banks are losing data to players like WeChat and Alipay. That’s going to happen in Thailand,” Kampanat Vimolnoht, head of investment & strategic partnership at Krungsri Finnovate told The Investor in a recent interview.
That is why Bank of Ayudhya, commonly known as Krungsri, launched the country’s first fintech accelerator program three years ago. Krungsri is the fifth-largest financial group in Thailand and a subsidiary of Japan’s Mitsubishi UFJ Financial Group.
Kampanat Vimolnoht, head of investment & strategic partnership at Krungsri Finnovate
“Krungsri Finnovate can help the group explore opportunities to work with technology and startups to accelerate its digital transformation,” Vimolnoht said.
It currently two runs accelerator programs, a strategic partnership program which links startups and the banking group’s various business units. It also directly invests in promising startups via its corporate venture capital unit.
It has invested in 35 companies so far and this year it is seeking startups with technologies in artificial intelligence, machine learning, blockchain, auto loans and mortgages.
Vimolnoht predicted an interesting development in the country’s fintech industry in the next few years partly because Thailand’s financial sector has a series of issues.
“There are many challenges in Thailand including difficult electronic Know Your Customer and low financial literacy, which means there are huge opportunities for fintech companies to help solve these problems for society,” Vimolnoht said.
In the country with a population of almost 70 million, more than 90 percent of the population is banked but 40 percent of them are underserved, Vimolnoht said. “Majority of Thai people find it hard to invest and have limited access to financial products,” he added.
“Startups that can help enhance the financial literacy of Thai people could have a chance to attain to economic benefits from such opportunities,” he noted.
He pointed out the insufficient e-KYC, online authentication mechanism for people, has made it difficult to acquire customers.
“Customer acquisition journey has been killed by most of the traditional KYC which makes opening new accounts for any financial product very difficult. Thailand has started developing such e-KYC now, driven by the government,” Vimolnoht said.
“Once e-KYC is mass adopted, it will be a catalyst for the growth of fintech industry here.”
By Park Ga-young (firstname.lastname@example.org)
This article is the result of collaboration between the Korea Herald and Antara, sponsored by the Korea Press Foundation.