Bank of Ayudhya (BAY) and its financial technology (fintech) venture arm are looking to directly invest in three companies in order to keep the bank's competitive edge as the fast-growing disruptive technology begins to reshape the retail banking landscape.
Krungsri Finnovate is eyeing two payment fintech firms and another that uses artificial intelligence (AI), said Thakorn Piyaphan, head of digital banking and innovation and head of Krungsri Consumer Group. The investment amount has yet to be finalised, he added.
Krungsri Finnovate, with a startup registered capital of US$30 million, is seeking the Bank of Thailand's approval.
A $30-million budget has been earmarked for the first phase of the bank's digital transformation during 2017-19.
In 2017, the country's fifth largest lender by assets will gradually roll-out its new digital banking services and platform. It plans to launch a smart contract service for commercial customers using blockchain technology.
For individual customers, the bank will offer a new mobile app for credit cards as well as a digital lending platform for credit card and personal loan products.
It also plans to unveil a robo-adviser for wealth clients.
Among the digital innovations in the pipeline are AI Chatbot, a call centre service via a digital robot equipped with AI, and E-KYC (know your customer), a biometric identification technology deploying fingerprints, iris and voice scans.
The bank will consider the investment budget before making a decision to employ each innovation.
E-KYC will be used at branches to widen customer verification from the ID card and signatures currently used.
In a related development, Mr Thakorn said the volume and value of transactional banking at BAY branches have declined significantly as customers shift towards the digital channel.
Meanwhile, financial transactions via smartphones showed strong growth of around 40-50% annually over the past few years.
BAY targets around 2 million accounts will be wired to PromptPay service when it kicks off, he said.
PromptPay, the cheaper online money transfer service under the government's national e-payment scheme, is scheduled to be launched in the first quarter of 2017, after being delayed from the end of October due to the lengthy trial period.
Krungsri Consumer, BAY's unsecured lending arm, plans to leverage digital technology for its nanofinance business expansion in 2017. Technology development is expected to strengthen its infrastructure base in both front and back offices to help business expansion.