FinTech has become a common buzzword that we often hear during the past couple of years. Financial technology has been one of the “big waves” in the startup industry and many are waiting to update about Thailand FinTech. Paul Polapat Arkkrapridi, Managing Director, Corporate Venture Capital of Digital Ventures shared his insights on FinTech at the Thailand Focus 2017. The event was organized by the Stocks Exchange of Thailand along with Phatra Securities and Bank of America Merrill Lynch. Check out the highlights below.
The Standpoint of Thailand FinTech – Where shall they begin?
FinTech in Thailand is still in its early stage, it is only 5 years old. Paul views that what FinTech really needs in order to innovate new things, is founders that have several years of financial experience. For instance, he/she may have worked in the industry for 15-20 years and felt ready to leave large enterprises. They may see new opportunities or want to become startup entrepreneurs. These people will be good foundations for startups that will develop with speed. With their experiences, they will know the pain point, problems, and know the solutions. Such knowledge along with innovation will greatly contribute to the FinTech industry. Examples are FinTech startups in North America with founders who once worked for large financial enterprises. One reason why Thailand’s FinTech are still lagging behind may be that the several factors that will enhance the ecosystem need time to develop. We may be moving slowly but Paul believes that we are heading towards the right direction.
Payment: Southeast Asia’s highlighted trend
Aside from China who is already well-known as the leader in various aspects, Asia is now a “battlefield” for payment services with several players seeking to lead the market. We see banks launching Mobile Banking services which are completely different from previous versions and moving towards services that match users’ lifestyles. It has become a hyper-competition and it is very exciting to see how this competition will influence Southeast Asia.
FinTech as a Disruptor: What it means to banks?
The word FinTech disruption may sense a feeling that this technology will make banks disappear in the future. This may not be the case. Changes will be products, services, and processes improvement rather than things that will replace banks. Many view that FinTech will affect the bank’s income as we know that bank’s main revenue derives from processing fees. Blockchain technology which reduces these fees will affect the banks. However, if we take a good look, we will realize that technology that reduces income, also reduces costs. Banks need to find ways to utilize the disrupting technology and benefit from them. In the future, banks may switch roles from managing customer assets to information management such as storing data, securing data, and data monetization. This is a great challenge for banks and Paul believes that in 10-20 years, banks will still exist.
Examples from a country that has advanced and quickly adapted to the technology
European countries have an advanced financial industry and house several FinTech firms. Sweden’s awareness and speedy adaptation to the technology is a good example. Sweden is well-known as leader of the cashless society. Today, 80% of Swedes complete their transactions via cards, smartphones, or tablets applications. Aside from bank transactions, daily routines such as paying the bus fare, are also done via cards or applications. As a result, most Swedes no longer carry cash. Such speedy adaptation and implementation is a result of the collaboration of banks, government, and lawmakers. Related parties aim at the same direction and this contributed to the significant change.
Overviews and updates show that related entities in Thailand also sense the significance of FinTech. If change is efficiently implemented, the population and related parties will surely benefit from the technology.