Virtual banking: SCB X and KakaoBank join forces for Thai licence bid

A consortium led by financial technology conglomerate SCB X is partnering with South Korea’s KakaoBank to apply for a virtual banking licence from the Bank of Thailand. SCB X, a holding company of Siam Commercial Bank, signed the agreement with KakaoBank, with the aim of bringing additional partners on board to improve competitiveness.

Arthid Nanthawithaya, chief executive of SCB X, said the partnership seeks to address income inequality in Thailand by providing access to financial services for those who remain underserved. “Thai virtual banks will play a pivotal role in allowing the underserved population to access financial products and services conveniently and safely,” Nanthawithaya added.

KakaoBank’s experience and expertise in managing virtual bank businesses are expected to enhance SCB X’s competitiveness in the sector. Virtual banks can offer better access to financial services for lower-income individuals and reduce operating costs in the banking industry by leveraging digital technology.

Yun Ho Yong, chief executive of KakaoBank, expressed optimism over the collaboration with SCB X, stating that it would benefit both Thai citizens and existing KakaoBank customers in Thailand and beyond. KakaoBank, South Korea’s leading mobile-first bank, hopes to emulate its success in South Korea’s retail banking market in Thailand.

Competition for virtual bank licences is heating up, with multiple firms from the financial, tech and telecom sectors expressing interest in obtaining the licence. The Bank of Thailand has postponed virtual bank regulations issuance from the first quarter to the third quarter of this year to provide more time to clarify business licensing with related stakeholders, reported Bangkok Post. The central bank plans to offer three licences for new business operations in the first round, as initially planned.

In an effort to fuel local business expansion and secure a new license in line with Thailand’s economic growth, HSBC Thailand has recently announced plans to raise additional funds. Read more HERE.