Thailand’s new virtual banks not much threat to incumbents: report

Regulatory restrictions and target customer segments will keep them from growing too quickly.

Thailand’s incumbent banks are safe in the near term from disruption that may come from the new virtual banks launching in 2026.

These three new virtual banks will have to operate under regulatory restrictions in the next 3-5 year period, says Moody’s Ratings in a June 2025 commentary.

Under the BOT's licensing framework, virtual banks will gradually increase their capital to at least THB10b ($306m) from THB5b ($153m) during the restricted phase.

Virtual banks are also expected to focus on lending to underserved and unserved segments. These include lower-income retail customers, self-employed customers and small businesses— customer segments that incumbents avoid lending to.

These provide buffers from immediate disruption to incumbent banks.

Thailand’s Ministry of Finance (MOF) approved three applicants to establish virtual banks, following a joint review with the Bank of Thailand (BOT).

The three successful applicants are ACM Holding Company, which is part of Charoen Pokphand Group (CP Group), Thailand’s largest conglomerate; a consortium consisting of Krung Thai Bank, PTT Oil, and Advinced Info Service; and a consortium with SCB X, KakaoBank, and WeTechnology backed by WeBank.

These new entrants will not be bogged down by physical branches and legacy infrastructure and can leverage on the complementary strengths of their consortium partners, Moody’s said.

“For instance, we expect the SCBX consortium to benefit from KakaoBank's and WeBank's years of operational experience and established track record in operating digital banks in South Korea and China, respectively,” it said.

The KTB consortium, meanwhile, is expected to capitalise on AIS' and PTT Oil’s positions as the leading mobile telecom and oil marketing companies in Thailand.

The virtual bank under ACM Holding Company will also likely make use of its parent group’s extensive physical presence in Thailand through its convenience stores and supermarkets.

Competition is expected to be tight for virtual banks, with incumbent banks having upgraded their own digital offerings.

“Some banks have expanded their digital product offerings beyond traditional banking services to include micro financing and wealth management services,” Moody’s said, adding that whilst other banks have partnered with third-party platforms to expand their digital presence.

Income contributions from these segments remain small, however.

“New virtual banks will need to find innovative ways to differentiate their product and service offerings from the incumbent banks,” Moody’s wrote.

The launch of PromptPay, Thailand’s real-time retail payment system, has also made transferring funds and payments faster.

The new entrants also face a more challenging macroeconomic environment compared with virtual banks in other parts of Southeast Asia because of Thailand's high household debt and modest economic growth, the ratings agency added.