Central Bank mulling digital banking licenses
Thailand is aiming to keep pace with technology designed to bring the unbanked into the financial system, as the central bank studies a proposal to issue licenses for digital banks, which it believes would improve financial inclusion and spur fintech development.
“In the digital era, the central bank needs to consider the overall banking landscape in the long term, and digital banks are an option,” said Ronadol Numnonda, Deputy Governor for Financial Institutions Stability. “Whether digital bank licenses will be issued needs a comprehensive study of all dimensions.”
The World Bank estimates that 30 percent of people in Thailand are unbanked, in other words they have no accounts or receive services from any bank or financial institution. The figure is the same for Malaysia and soars to 80 percent in Indonesia, the Philippines, and Viet Nam.
The bank has said on its website that “achieving the Sustainable Development Goals would be tougher without bringing people into the banking system” as financial inclusion is strongly linked to development and shared prosperity.
While 30 percent of people in Thailand may be unbanked, nearly every Thai has a smartphone and access to the internet. Fintech developers see growth potential in bringing those people into the financial ecosystem through apps digital currencies, peer-to-peer lending, and mobile wallets, among other innovations.
Digital-only banks are a growing phenomenon in Japan, South Korea, and China. Last year, regulators in Hong Kong, Taiwan, and Singapore issued digital bank licenses, while Malaysia is expected to accept license applications this year.
Photo courtesy of https://www.bot.or.th/Thai/BOTMagazine/Pages/256203CoverStory.aspx