Bank of Ayudhya (BAY), the country's fifth-largest lender by assets, has upgraded its e-business unit to a digital commercial solution division to capitalise on the trend of digital banking and financial technology (fintech).
The upgrade is expected to be completed by the year-end, said Thakorn Piyapan, head of digital banking and innovation.
The move makes BAY the latest commercial bank after Bangkok Bank, Siam Commercial Bank (SCB) and Kasikornbank (KBank) to jump on the fintech bandwagon.
Mr Thakorn said the upgraded business unit's coverage will include both financial and non-financial services. The upgrade is part of the bank's three-year plan for a digital banking restructure starting this year.
Yesterday the bank also launched Krungsri RISE Fintech Accelerator, a collaboration with RISE, a local corporate accelerator. It is looking for 10 fintech start-ups whose applications can work on BAY's platform. The bank has no plans to invest in these start-ups, he said.
BAY's digital banking plan is different from that of SCB and KBank, where subsidiaries are set up to expose the business and the banks plan to make both direct and indirect investment in fintech firms.
"Our model is suitable for BAY as it aligns with our resource and business strategies. It requires longer for proof of concept than a subsidiary model, but the bank wants to build up know-how in innovative finance by ourselves," said Mr Thakorn.
He said non-performing loans (NPLs) for BAY's unsecured loan products should decline by 25 basis points year-on-year in 2016, thanks to improving risk management. Its NPLs make up 3.2-3.3% of total personal loans while bad credit card loans comprise 1.4%, with the bank aiming to keep these ratios this year despite a higher loan portfolio.
Krungsri Consumer targets its unsecured loans outstanding to grow to 132 billion baht this year from 128 billion. Credit card loans are projected to grow by 8-9% this year and personal loans by 5%.
BAY's shares closed on the SET yesterday at 36 baht, up 75 satang, in trade worth 51.2 million baht.