Siam Commercial Bank pivots to digital banking

Written by Kapronasia || March 21 2023

It was not so long ago that Siam Commercial Bank (SCB) was singing cryptocurrency’s praises and preparing to invest US$500 million in the Thai crypto exchange Bitkub. Alas, it was not meant to be. The crypto market cratered, and one of the kingdom’s largest lenders thought better of betting so big on a sector of financial services with so much inherent risk. SCB is now pivoting to what is turning out to be familiar territory for incumbent lenders in Asia: digital banking.

As a latecomer to digital banking in Asia, Thailand has the benefit of hindsight and it seems the Bank of Thailand (BoT) likes what it has seen elsewhere in the region. Thailand’s neighbors like Singapore, Malaysia, Hong Kong, South Korea and Taiwan have all greenlighted online banks – but in most cases their key investors are incumbent financial services firms or if not, Big Tech. In some cases it is both. Startups are noticeably absent from the competitive landscape in most of these markets.

SCB is well positioned to hop on the digital banking bandwagon. First, it is large and well capitalized. It is Thailand’s No. 4 lender by total assets and the industry leader in wealth management with a total customer base of 400,000 and AUM of 1.6 trillion baht.

Further, it already has a well-established digital presence. Of its 17 million customers, 14 million or 80% are users of its mobile banking platform SCB Easy. The app ranks among the country's top 10 apps and the top three for banking in terms in terms of usage. Further, the total number of users of the bank's digital apps and related digital services is 25 million.

SCB’s digital banking ambitions go beyond its home market – one of the best banked countries in Southeast Asia. More than 80% of Thailand’s 71.6 million have a bank account, and SCB already has a lot of Thai customers of its existing services.

For this reason, shortly after SCB nixed its planned Bitkub investment, it invested US$50 million through WeLab Sky in Indonesia’s Bank Jasa Jakarta (BJJ). The market opportunity is much larger than in SCB’s home market. Indonesia has an unbanked population of about 181 million people, more than 2 ½ times Thailand’s entire population.

It will be interesting to see if SCB partners with any other firms when it applies for a virtual banking license. Some non-bank players have recently expressed interest in moving into digital banking. For instance, the agricultural conglomerate Charoen Pokphand Group is expected to optimize its nationwide 14,000-branch network of 7-Eleven convenience stores or even use the vast customer base of its telecom subsidiary True to raise deposits for running a virtual bank. Additionally, Jay Mart, a giant mobile retailer and holding company for technology investments, said it was interested in digital banking and was about to search for partners for a license.