Virtual bank race: 5 in the running

The Bank of Thailand has received five applications for three virtual bank licences, with two of the bidders set to drop out of the race over the following year.
The new virtual banking businesses are scheduled to begin operating in mid-2025.
According to Somchai Lertlarpwasin, the central bank’s assistant governor for the financial institutions policy group, the application window closed on Sept 19 and five business groups submitted their proposals for virtual bank licences.
Mr Somchai said the central bank will evaluate the applicants based on their qualifications, capabilities, and potential for operating a virtual bank. The evaluation will take into account the benefits to the Thai financial system and economy, along with any potential risks to financial stability.
“The list of approved virtual banks must be ready to commence operations within a year, with announcements expected by mid-2025,” he noted.
The five business consortiums applying for virtual bank licences are led by Gulf Energy Development, SCB X Group, Ascend Money Group, Sea Group, and Lighthub Asset.
Gulf has partnered with Krungthai Bank, Advanced Info Service, and PTT Group through PTT Oil and Retail Business. SCB X is collaborating with KakaoBank, South Korea’s largest digital bank, and WeBank, a globally recognised digital bank known for its innovative technology.
Meanwhile, Ascend Money, a fintech firm supported by the Charoen Pokphand (CP) Group and operator of TrueMoney, is teaming up with Ant Group, an affiliate of Alibaba Group and a stakeholder in CP’s Ascend Group.
Singapore-based Sea Ltd, which operates the Shopee e-commerce platform, has partnered with BTS Group through its VGI advertising unit, Thailand’s largest lender Bangkok Bank, major consumer conglomerate Saha Group, and Thailand Post.
Lighthub Asset, co-founded by Chatchaval Jiaravanon and Lightnet Group, is collaborating with WeLab, a pan-Asian fintech platform.
Kanjana Chockpisansin, head of banking and financial sector research at Kasikorn Research Center, said the business groups within the five consortiums possess strong financial standing that meets the central bank’s requirements for virtual banking operations.
“The business model is crucial for securing approval. The proposed virtual banks must meet regulatory expectations by expanding financial services to unserved and underserved segments, including individuals and SMEs [small and medium-sized enterprises],” she said.
Ms Kanjana added that pricing will likely be another important factor for the central bank’s consideration, with interest rates for virtual banks expected to adhere to risk-based pricing practices.
However, a solid financial ratio is essential. The proposed virtual banks will likely need to maintain a stronger BIS (Bank for International Settlements) ratio compared to existing commercial banks during their initial operations.