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Following in the footsteps of Southeast Asian neighbours Singapore, Malaysia, Indonesia and the Philippines, Thailand’s central bank, Bank of Thailand (BOT) is prioritising the establishment of formal digital banking licences.

BOT has now opened its draft Virtual Bank Licensing Framework for consultation by the industry. This framework, once finalised, will guide interested parties on the regulatory, licensing, and supervisory requirements of applying for a formal digital bank licence in Thailand.

New virtual bank licences to bolster competition and drive innovation

As with many other Asian nations, Thailand’s central bank has stated that the focus of any new virtual banks in the country should be on improving access to financial services for underserved and unbanked segments of the population – including for individual consumers, as well as micro, small and medium enterprises (MSMEs). While Thailand’s official financial inclusion rate is high, with 99% of Thai households having access to basic financial services (BOT 2020), many Thai consumers and businesses are underserved – that is, they don’t have access to the financial services and products that they actually need and want.

The introduction of the new virtual bank licences has been touted by BOT as an effective way to drive competition within the financial services industry, while also fostering innovative new ways of thinking that can help to address underserved markets.

Fintech to enable financial inclusion in Thailand

As we know from the experiences of other countries, agile fintechs are often best positioned to roll out financial products and services that effectively increase access to financial services for people who are currently excluded. Whether they are excluded due to low income (i.e. they can’t hold a bank account as their income is too low) or location (i.e. living in rural and remote areas with limited access to services), digital financial services have been effectively enabling financial inclusion for unbanked and underserved consumers across the globe for many years now.

In Thailand, a focus of the virtual banks will be on improving access to credit and lending services for the country’s millions of MSMEs, many of which are currently operating on a cash basis, with no access to funding to fuel growth.

High standards imposed by BOT

To minimise risk while still driving innovation, BOT’s proposed framework demands a very high standard of financial security and experience of all applicants, which will make it difficult for smaller startups and SMEs to enter the race, with all applicants needing to have at least 5 billion Baht (USD $151 million) of registered capital on the day of commencement.

The new virtual banks must be 100% purely digital, meaning no branded automatic tellers or cash deposit machines, however withdrawals and deposits will be possible via other bank ATMs. While digital banks in some Southeast Asian countries, including Vietnam and the Philippines, have rolled out ‘kiosks’ where customers can open new accounts and talk with bank staff face-to-face (generally via retail outlets), Thailand’s virtual banks must operate online only.

Out with the old… legacy technology

Another key point to note in the draft framework is that the successful virtual banks must not be operating on a legacy technology system – that is, these new banks must be built on next-generation technology platforms. This will ensure that the new banks are built for change and will be able to respond to evolving market and consumer demands as required.

As we’ve done in Malaysia, Singapore, the Philippines and Indonesia, Mambu’s APAC team looks forward to working closely with some of the virtual bank licence applicants in Thailand over the coming months to guide them on technology decisions and ensure they’re building future-ready banks that will withstand the tests of time.

Draft framework under review

BOT’s Virtual Bank Licensing Framework is currently available for review, with comments and suggestions on the proposed framework due by 12 February 2023. After this date, feedback will be compiled and relevant comments included in BOT’s submission to Thailand’s Ministry of Finance for consideration.

It is expected that the MoF will release the final framework and launch the licence application process during 2023, with successful applicants to be announced in 2024.

It is an exciting time in Thailand to see the country take another step towards a regulated digital banking industry and a sustainable digital economy.



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William Dale
Will is responsible for driving growth of the business across the APAC region. During his career, Will managed large enterprise transformation projects and he now works on technology architecture, business models and consumer product strategy with neo-banks, tier one banks, fintechs and financial brands who rely on the Mambu platform to provide banking, lending and BPaaS services.
William Dale