SCB X, a holding company of Siam Commercial Bank (SCB), is keen to obtain a virtual bank licence as part of its five-year business strategy.
Speaking at a general shareholder meeting on Wednesday, Arthid Nanthawithaya, chief executive of SCB X, said the company has a positive view of virtual banking as a new business that can enhance financial inclusion and reduce financial inequality in the Thai market, in which around 10 commercial banks cater mainly to middle to upper-income customers. Lower-income people, who constitute a large proportion of the population, often rely on loan sharks.
By leveraging digital technology, a virtual bank could provide better access to financial services for lower-income earners, while reducing operating costs for the banking industry, he said.
SCB X is waiting for the Bank of Thailand to issue licence regulations.
"Digital loan development is a key part of SCB X's business strategies," said Mr Arthid.
The company's five-year business plan from 2023-27 calls for upgrading its technology and strengthening data efficiency in the first phase, which will span one to two years. SCB X allocated a digital investment budget of 2-3 billion baht for 2023, with a focus on cloud systems, cybersecurity and data artificial intelligence.
Development of technology should facilitate the expansion of digital loans, which the company sees as a new source of S-curve growth, he said.
As part of its business transformation, the company classified its operations into three generations. The first generation encompasses banking services operated under SCB, while the second generation comprises consumer and digital financial services. The third generation covers platforms and digital assets operated by SCB X.
According to Mr Arthid, the company anticipates second generation businesses should deliver a healthy return over the next two to three years, representing the second phase of its plan. Although the subsidiaries under this generation have yet to book a net profit, they have demonstrated positive loan growth, he said.
As an example, last year Auto X, a car title loan service provider under the Ngern Chaiyo brand, grew its total loan portfolio to 7.5 billion baht with 60,000 customers and opened 1,600 branches across the country.
Alpha X, a luxury vehicle loan provider, expanded its outstanding loan portfolio to 3.8 billion baht.
In a separate development, Mr Arthid said SCB and other commercial banks may not change their cash transaction fees until they receive direction from the central bank.
"Recently there were numerous complaints about fees charged for cash transactions, which indicates consumers strongly disagree with such fees. As a result, banks are re-evaluating their approach and have not taken any action on the matter," he said.
Last week, Krungthai Bank revealed its plan to impose a fee of 10 baht per transaction for cardless cash withdrawals at ATMs starting next month. However, a deluge of complaints from customers caused the bank to promptly rescinded the plan.
SCB, the fourth-largest lender in the country in terms of total assets, announced an increase in its prime loan interest rates, including the minimum retail rate, minimum lending rate, and minimum overdraft rate, by 0.25 percentage points each.
The bank also raised fixed deposit rates by a maximum of 0.30 percentage points, effective April 6.
