Interview: Chartsiri Sophonpanich
What investments is the banking sector making in digitalisation?
CHARTSIRI SOPHONPANICH: Digitalisation is affecting every aspect of our lives, and this is reflected in the growing popularity of e-commerce, mobile devices and social media. The banking industry is supporting this trend through the provision of electronic payments and transactions, and at Bangkok Bank we are upgrading our systems to support the changing needs of society.
Developments in technology over the past five years allow us to offer services which are highly secure and very rich in functionality, with an intuitive user interface. Customers have embraced these new channels, particularly mobile banking with its promise of “anytime, anywhere” transaction banking, which is especially popular with the younger generation. We see it as having immense potential to support financial inclusion and help expand the bank’s reach to unbanked individuals. We also see strong potential in the use of the mobile channel for payments, such as our recently introduced person-to-person payments, and enhanced services, such as location-based offers, analytics-based cross-selling and more in-depth personal finance management capability.
Meanwhile, our branches and business centres across Thailand will use advanced collaboration technologies, such as Skype, for business, to allow customers even in remote branch locations, or in their own homes or places of business, to access remote experts for advice on securities, investments, insurance and other complex products. As one of the largest regional banks in the newly-created ASEAN Economic Community, these capabilities will be key in serving customers and growing our business.
What is your assessment of the rising levels of household debt and non-performing loans (NPLs)?
CHARTSIRI: Household debt rose rapidly over the previous two or three years, in large part due to government policies, such as incentives for the purchase of new cars. However, this has levelled off and householders and businesses are now more cautious in borrowing, while banks are more cautious in lending. Although NPLs have been rising due to increasingly difficult economic conditions, they are still well below historic levels and are manageable. Banks have high levels of reserves and, moreover, the general strength of the Thai banking sector is well recognised and commented upon by ratings agencies.
What significant opportunities and challenges have you encountered during Bangkok Bank’s entry into the Myanmar market?
SOPHONPANICH: There are many foreign companies operating in Myanmar in high-potential sectors, such as export-oriented industries, food processing, energy and power, infrastructure, hotels and tourism, textiles, and automotive and retail distribution. There are also many existing clients from the bank’s large and diversified network of international customers, as well as Thai companies, many of which are likely to invest in Myanmar. Many of our customers are interested in investing in Myanmar over the next five years. As we have expertise in financing large-scale projects outside Thailand and, particularly, in the Greater Mekong Subregion, including infrastructure-related projects, energy and manufacturing, we are keen to contribute to such projects as a financial advisor and partner for Myanmar banks.
Given Myanmar’s high potential and Thailand’s unique position as its second-largest trading partner we see big opportunities in this area. Thai banks are developing branches and business centres along the Thai-Myanmar border and have the capability to effectively facilitate cross-border flows between the two countries. We are now servicing two-thirds of all cross-border trade and remittance volumes from Thailand and we see considerable growth in this area.
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