Tan Choon Hin, CEO, United Overseas Bank Thailand
Digitalisation efforts allowing Thailand’s banks to reach unbanked customers
In this Global Platform video, Tan Choon Hin, CEO of United Overseas Bank Thailand, discusses industry trends across ASEAN, including regional integration and the push towards Industry 4.0. For Thailand, the digitalisation strategy that is being pursued under Thailand 4.0 is improving internet infrastructure, which in turn is opening up opportunities for digital banking. Tech solutions and programmes for the country’s significant small and medium-sized enterprise sector are broadening banks’ traditional customer bases.
If you look at ASEAN and especially the ASEAN 5, the banking market within the country is really quite competitive. Local banks thinking of expanding into another country and starting from scratch – it is actually quite hard. I think there are a lot of opportunities if there is total integration. Better integration basically fuels more efficient capital investment flows across the region. So, with the advancement of technology and with all the countries pursuing Industry 4.0 to digitalise their own economy, I believe that with better integration the banks will be able to serve our customers and connect our customers regionally in a more efficient manner. All of the ASEAN countries in one way or another are pursuing Industry 4.0. With the advancement of technology, with the 5G network going to happen in the near future, I think all the governments are very cognisant and pursuing to really upgrade the economy to ensure that they can compete with the rest of the region as well as the rest of the world. The government of the ASEAN countries has both the economic and the political will to ensure that their respective economy is being upgraded so that they can actually uplift the competitiveness of their own economy to compete with the rest of the world.
Within the Thailand 4.0 agenda the EEC, the Eastern Economic Corridor initiative, is really a big part of it and we are seeing very steady progress, beginning with the enactment of the EEC act. The second aspect of it is that the government has actually identified all the major projects that’s required to be pursued within the EEC region. The high-speed rail, of course, the U-Tapao aviation part, as well as the Laem Chabang Seaport, two other big projects that we expect will be concluded either at end of 2019 or early 2020.
The other big agenda under Thailand 4.0 is really about digitalisation, and on that aspect, the government has been pursuing the enablement of Wi-Fi networks across the country. So what they have done is they have been laying fibre optics around nationwide, and in fact they have laid fibre optics to some 25,000 villages in the remote areas, trying to get everybody connected to the network. Digitalisation of the economy as well as banking services enable the banks to reach out to clientele who were not within our reach in the past. Take our digital bank, for example. Tomorrow, which we launched in 2019, has a full digital onboarding capability, where our customers don't need to come to the branch to open an account with our digital bank. This means that we are able to now access a bigger population of Millennials and clients outside of the region of our traditional branches. And I think this is one very good example of how digitalisation can bring about broader financial inclusion and reach to the broader community. There are over 3m SMEs in Thailand and they form 99.7% of all corporates. In 2018 SMEs contributed about 36% of the Thailand GDP and the government expects that the number will go to 50% by 2025.
A lot of the SMEs are now into the next generation, either the second or third. As a bank we believe that we have the expertise and know-how and we are in the position to guide our SMEs to really go about digitalising their business. And in UOB, we have actually launched the UOB smart business transformation Programme for our SME customers. Thailand is the first country to launch this programme outside of Singapore in 2019. We have some 500 SMEs who actually come and attend our seminars and our business transformation programme. Many of them have seen a tremendous improvement in their business after going through the programme. So, this is one area which we believe banks can value add and really help our SME customers.