Digital-savvy Thais push banks' fintech adoption: S&P
About 60% of the population are more attuned to digital services.
Thailand’s digitally shrewd clients are pushing its major banks to boost their technological investments in an effort to remain competitive, according to an S&P Global Ratings report.
About 60% of the Thai population are between 15 and 55 years old, a segment that is becoming more attuned to digital services. Good mobile internet and surging smartphone penetration have also been beneficial. Furthermore, the government and the central bank have been influential in generating favourable conditions for digital banking, the report said.
As a result, top tier banks have already started modernising their technological infrastructure, rendering them well positioned to compete with new fintech players. Those that delay investing in fintech could lose market share, S&P warned.
Moreover, a record number of digital banking transactions have taken place during the pandemic, pointing to a strong acceleration in fintech adoption.
Thai banks' brick-and-mortar presence will eventually shrink as more transactions go online, even if Asian clients still prefer face-to-face transactions unlike their European peers. “We therefore believe that the number of branches in Thailand won't fall to the Nordic lows, but their form and utility will evolve over the next few years.”
Fitch does not currently view fintech as a catalyst in its ratings on Thai banks, but it acknowledged that it will become “a greater differentiator.”