The rapid growth of Information Technology over recent years has a greater impact on the change of consumer behavior including economic systems and financial institutions across the world. In Thailand, The Bank of Thailand has supported the basic structure of Digital Financial Services, for example; PromptPay, National Digital ID (NDID), including an amendment to the law that financial institutions can provide digital services easier. Additional to Mobile banking that is familiar to everyone, there’re new emerging technologies in financial services, such as Digital Personal loans, etc.

Many countries are now permitted to set up a Virtual bank in which transactions are serviced through digital channels only. In Thailand, Virtual bank is under a comprehensive study of all dimensions, such as the objective, impact, and potential risks.

The service features of Virtual bank

• No branch and ATM service are available but Headquarters exist.
• All financial processes are serviced through digital platforms.
• All financial processes are serviced through digital platforms.
• More flexible than traditional banks. Financial innovations are created rapidly regarding customer changes and needs.
• Effectively create an experience in financial services.
• A savings account is available without the bank book. The account holder can split the account according to the objective of the deposit.
• Generate higher interest on a savings account than a general savings account, and customers may earn daily interest.
• AI is available to recommend savings and spending plans in line with the account holder’s behavior.
• Open an account easily with a smartphone.
• Get quick approval for a loan, and an income statement is not needed.
• Services are offered to SMEs; Integrate savings account with the online accounting system, etc.

However, overseas, traditional commercial banks and non-bank with technological capabilities that used to deal with financial businesses like FinTech, E-commerce, Telecommunication companies, or the Platform-as-a-Service (PaaS) providers, can create many forms of Virtual Bank as follows.

1. Build a subsidiary company separate from a traditional commercial bank.

2. Build a Non-bank subsidiary.

3. A joint venture between a variety of businesses, for example; Co-investment between the traditional commercial banks and Non-bank or Co-investment between different types of non-banks to enhance core strengths among them.

Referring to the performance of Virtual banks in several countries, it’s found that the number of customers has rapidly increased. That’s because the customer application process is easy and KYC or customer verification process can be done quickly. Moreover, there’re many connections on the customer base from the previous business platforms. As the Virtual bank business has just been in the market, monitoring and evaluation will need to be done continuously. In many countries, the permission of operating Virtual bank in the first stage is still under control, for example; a limit on savings account deposit, and a limit on the area of additional business operation from the traditional commercial banks, such as service provided for Retail, or for Wholesale or Juristic person. There’s also stability governance which includes capital criteria and liquid assets as equal to traditional commercial banks. Let’s follow up on when Virtual bank will be allowed to launch in Thailand.

References :

https://www.bot.or.th/Thai/ResearchAndPublications/articles/Pages/Article_13May2021-3.aspx?fbclid=IwAR3KTzIfZy5cbHL8fgwzMf9q94Sa16H63BnqHo_NUBmY2_aGYJZpwXX3FyM