The formation of The Fintech Association of Thailand was announced today at the ‘Positioning Thailand’s Fintech Ecosystem’ conference held at C-asean. The association will see government figures, banks, regulation officers and the private sector join forces to drive Thailand’s fintech industry to its full potential.
The event was a roundtable discussion with key figures in the financial, media and regulatory sector, where a number of important issues and topics regarding the country’s Fintech landscape were discussed.
C-asean launched the event in collaboration with the esteemed panel of speakers:
- Wisudhi Srisuphan, Thailand’s Deputy Minister of Finance
- Dr. Veerathai Santiprabhob, Governor of Bank of Thailand
- Korn Chatikavanij, Thailand’s Former Minister of Finance
- Tipsuda Thavaramara of the SEC Thailand Deputy Secretary-General
- Teeranun Srihong Senior Executive Vice President of Kasikorn Bank
Thailand’s weak fintech infrastructure
According to Korn Chatikavanij, Thailand has a good market size with innovative ideas to drive the fintech industry forward. However, what the country currently lacks is the integration of sectors, from private to public, and also between regulators. Talks regarding the government’s e-payment initiative, PromptPay, has brought into light the country’s readiness for a cashless society and trust issues.
Thailand lacks one crucial component; the ability to address and identify problems with infrastructure.
However, it is time to acknowledge that industries need to be disrupted, and traditional banking services must adapt with changing trends.
One of these trends is the request for traditional banks to close down rather than expand as amount of online services grow. Although most of these changes are happening in Bangkok, the government’s PromptPay rollout strives to shift the whole country to digitized payments.
Ideas such as blockchains and ‘smart contracts’ that have been adapted in other countries are thrown around simply as buzzwords in Thailand instead of viable solutions.
In Singapore, the government and private sector support the fintech initiative by allocating funds to all startups and sectors that develop fintech, from hardware development to programming. This is how successful fintech companies accelerate quickly. These kinds of development need to happen in Thailand.
The main consensus from panelists,
Fintech cannot be treated as a buzzword, companies must be accountable for their mistakes and prioritize the customers.
In order to pave way for financial innovation, there must be competition in the marketplace, according to Tipsuda Thavaramara from the SEC, and this means properly defining regulations that control traditional systems.
Global players pose as the real threat to digital development
Thailand should not be concerned about competing with other finance players in the country, such as banks or firms, nor should it be concerned about competing with other ASEAN countries’ fintech development. It is big players such as Alibaba that we should be concerned about, says Korn. Global companies have the bandwidth to disrupt domestic development.
Without strong domestic development, the country could potentially lose out to popular payments in China and the West such as Alipay and PayPal.
“Cannibalization of the industry is ok as long as we participate in the cannibalization” – Teeranun Srihong, Senior Executive VP of Kasikorn Bank.
How to regulate fintech
Members of the panel proposed to set up a ‘sandbox’ as a space to outline regulations and facilitate fintech startups to grow. The sandbox is to be treated as a lab space.
Regulators in Thailand are traditionally conservative and hardly deviate from the fine print. However, the Bank of Thailand is working wth the government to relax certain financial regulations.
Regulation should be principle based, rather than rule based. A good regulator must also be an innovation facilitator. Rules cannot be rigid when it comes to technology.
Aside from reviewing regulations, the government is also working to push out e-KYC (electronic-know your customer), which is supposed to validate and store user data. This will be very useful following the launch of PromptPay. In Q4 of this year, The Bank of Thailand will also be pushing for the launch of QR codes to support the e-payment system.
The formation of the Fintech Association will be beneficial in driving progress and conversation forward as it will provide a viable link between different sectors needed to push the country’s fintech advancement forwards. However, a lot of work is left to be done until Thailand can claim to be a fully functional digital society.
Written By: Anutra Chatikavanij