Applications for virtual bank licences to close on Sept 19

Four large groups are in the running to become a licenced Virtual Bank as the deadline for applications looms. The Bank of Thailand and the Ministry of Finance will then evaluate the qualifications of the applicants, with the winning candidates to be announced by mid-2025 and operations expected to start a year later.

The Virtual Bank license application process has drawn the attention of major domestic and international financial groups eager to compete in this new arena. Besides expanding financial access, this sector holds immense potential to generate substantial revenue and new business opportunities.

Based on prior announcements from major financial players, the four joint venture applicants are detailed below.

SCB X

SCB X, the parent company of Siam Commercial Bank, one of Thailand’s top financial institutions, boasts a robust customer base and significant resources. It has long operated securely in the banking and financial sectors and has transitioned into the digital world through massive technology investments.

Joining it is KakaoBank, the largest digital bank in South Korea, which brings not only expertise in virtual banking but also technological prowess that enhances access to financial services. KakaoBank’s success in South Korea is notable, with over a million users just five days after its launch, which quickly positioned it as the top digital bank in the country.

WeBank, China’s number one digital bank, is another strong partner. It is highly successful, with 362 million user accounts, primarily serving the working class. Around 75% of its users are from the unserved and underserved populations, showcasing how WeBank uses new technology to expand access to financial services.

Combining the trust and solid foundation of SCB X with its strong customer base and resources, alongside cutting-edge technology from WeBank and the user-friendly expertise of KakaoBank, this group has exceptional potential to thrive in the competitive Virtual Bank market.

Krungthai-AIS-Gulf-OR Alliance

Krungthai Bank, one of Thailand’s largest commercial banks, plays a critical role with its expansive customer base, including almost 50 million users through the “Paotang” wallet platform. With its financial expertise, credibility, and deep understanding of customer risk profiles, Krungthai is well-prepared for the Virtual Bank business.

AIS, Thailand’s largest telecom provider, boasts a nationwide network, which will be key in extending Virtual Bank services to remote areas that traditional banks have yet to fully reach. AIS’s extensive infrastructure will be vital in bridging the digital divide, enabling more customers to access digital banking services.

OR, with its extensive network of gas stations and non-oil retail businesses, offers significant opportunities for targeting new customer segments. Its wide-reaching consumer access points across the country will support the alliance in expanding its customer base and promoting Virtual Bank services to a broader audience.

Ascend Money Group under TrueMoney

Ascend Money Group, a digital wallet provider under TrueMoney, is part of the Charoen Pokphand (CP) Group. Leading the charge is True Corporation, one of Thailand’s largest telecommunications companies with a vast customer base across mobile phones, internet, and cable TV. This extensive reach gives True a significant advantage in entering the Virtual Bank business.

In addition to telecommunications, True currently operates in the digital finance sector through TrueMoney, a popular digital payment platform in Thailand with over 10 million users. True’s extensive network of domestic and international partners also strengthens its position, offering potential collaborations for future Virtual Bank ventures.

Given their readiness and the robust financial ecosystem they have built, Ascend Money Group is a strong contender in the Virtual Bank landscape, with a well-established digital payment system and comprehensive resources.

Dark Horse Group: BTS-Bangkok Bank-Sea Limited

The latest entrant in the Virtual Bank race is the BTS Group Holding, which plans to leverage its subsidiary, VGI, to vie for a share of the Virtual Bank market.

The BTS Group has partnered with Bangkok Bank, Thailand's largest financial institution, to strengthen its bid for the Virtual Bank license. They have also recently included Sea Limited in their consortium.

The collaboration between BTS Group and Bangkok Bank is built on a long-standing relationship between the top executives of both companies, which dates back to their predecessors. This historic cooperation has continued into the current generation.

Sea Limited, with its strong background in technology and its substantial presence in Thailand through Shopee and AirPay, brings significant expertise and financial strength. Founded by Singaporean billionaire Forrest Li, Sea Limited operates across various sectors, including gaming, e-commerce and digital financial services. The company’s impressive valuation and financial success bolster its position in the Virtual Bank competition.

The key point of interest will be whether the Bank of Thailand’s initial plan to issue licenses to just three entities will change. The Finance Ministry is currently considering increasing the number of licences to foster greater competition, which could lead to better services and lower costs for consumers.