Local Banks Challenged By Fintech Wake-up Call
Fintech (financial technology) has in recent years risen to challenge Thailand’s banking industry, which must improve its technology wing in order to stay competitive, as recently told to a business forum’s participants.
Competition from players in the non-banking sector is needed in order to get tougher with regards to peer-to-peer and payment in particular, as stated by Shirish Apte, the ex co-chief executive and member of Asia-Pacific Citigroup and Citi’s executive & operating committee respectively.
While speaking at a CEO forum on the most recent financial industry news and its affect on workforce, held by an international management consulting firm called Korm Ferry Hay Group, Mr Apte exclaimed that the main fintech giants in competition with the banking industry were PayPal, TransferWise, Lending Club, Baidu, Google Wallet, Aliplay, and Apple Pay.
He also added that together with this disruptive trend, banking sector customers have also been altering their behaviour according to these tech developments and increasing the level of demand for digital channels, thereby continuing their disloyalty towards banks.
A survey by Javelin Strategy and Research found that about 71% of mobile users claimed that mobile and online banking were enough to satisfy their banking needs. About 74% of users used banking services from computers, while above 30% changed banks due to better value for money and customer service.
The meeting point between customers and bankers has changed over time. Using less paper, transactions are now moving online from face-to-face.
The role of branches of a bank has been filled by services like FaceTime and Skype to provide the user with a different experience, he said.
Advances in technology along with the current rate of globalisation facilitate banks to offer its customers a large range of products via a diverse range of channels. The development of the banking industry is from offering basic financial products like deposits to insurance and mutual funds.
In addition to this, customers have increased their activity in comparing services and products and are ready to change banks if they find one with value for money and better customer service.
Mr Shirish had also stated that it was vital for domestic banks to compete with international financial institutions with the technological development and changing landscape.
Usually, there are 3 to 4 banks that dominate the banking industry of every country. Thailand however, has four – Bangkok Bank, Siam Commercial Bank, Krungthai Bank, and Kasikornbank.
Keyphrase – FinTech