AIS in talks with PTT OR for virtual bank licence application

Potential collaborations are underway as Advanced Info Service (AIS) engages in discussions with PTT Oil and Retail Business (OR) and a digital platform provider. The objective is to apply for a virtual bank licence from the Bank of Thailand, revealed AIS Chief Executive, Somchai Lertsutiwong. This partnership would be an addition to AIS’s current plan to secure a license with its existing partner, Krungthai Bank (KTB).

In the previous year, AIS and KTB made public their intention to collaborate on the creation of a virtual bank. However, as Somchai pointed out, the discussions regarding the partnership are still ongoing, with all parties awaiting final information from the central bank.

The Bank of Thailand’s announcement regarding application submission is pending approval from the Finance Ministry. Once the green light is given, the announcement can be officially published in the Royal Gazette, triggering the application process.

In Somchai’s view, each potential partner brings a unique strength to the table. KTB boasts a strong brand, a proven success record, and financial services expertise. AIS, on the other hand, offers digital technology prowess, nationwide network coverage, and customer service. He also highlighted OR’s firm retail network and consumer base, given its position as the oil and retail business arm of the PTT Group, reported Bangkok Post.

Once the central bank initiates the application process, AIS and its partners are prepared to submit a licence application, Somchai confirmed.

He identified a high demand for loans across the nation, particularly among retail borrowers and underserved sectors. Somchai previously stated that the synergy of a telecom operator and a bank forming a partnership would be an ideal model for capitalising on digital platforms. He noted that the collaboration would cater to the evolving business landscape through cost-effectiveness, innovation, and cross-industry operations, necessitating banking expertise, intelligent networking systems, and data analysis.

Data analytics

AIS dedicated considerable resources to data analytics and science, with over 100 staff members on its team, and is looking to recruit more personnel in these crucial fields to serve its operations and the virtual banking ecosystem, Somchai revealed. AIS has spent five years developing a digital credit rating model using data analytics systems.

The central bank outlined its latest guidelines for virtual bank licensing, emphasising the need for operators to utilise technology, data, and digital technology skills to provide innovative services via a digital channel. These services should cater to various groups.

The regulator emphasised that virtual banks should offer comprehensive services to all customer groups, with a focus on retail customers, small and medium-sized enterprises, and low-income earners and individuals without a steady income or inconsistent financial track records.

The same regulations governing commercial banks will apply to virtual banks, the regulator stated.

In related news, SCB X and KakaoBank, in a consortium, aimed to address income inequality in Thailand by applying for a virtual banking license from the Bank of Thailand.