BAY studies banking agents for transactions
published : 5 Mar 2018 at 04:30
newspaper section: Business
writer: Somruedi Banchongduang
SET-listed Bank of Ayudhya (BAY), the country's fifth-largest lender by assets, is studying a plan to provide a full range of transactional banking services through banking agents, while vowing to continue expanding its physical branch network.
The bank is keen to provide services through several types of potential banking agents, including convenience stores, petrol stations, telecom networks and top-up machines, said Ponganant Thanattrai, head of BAY's retail banking and distribution group.
But the bank will wait for the Bank of Thailand's amended regulations before finalising a banking agent strategy, he said, adding that the banking agent model will help customers in remote areas get better access to the bank's financial services and allow BAY to expand its customer base with lower operating costs.
"Agents should not offer overlapping services in the same area," Mr Ponganant said. "The security system of banking agents is another key concern that the bank needs to study prudentially."
Thailand Post offers payment services to BAY clients.
The bank is in talks with top-up machine maker Boonterm to provide banking agent services. Those negotiations are expected to be finalised soon, Mr Ponganant said.
The central bank's amended banking agent regulations are expected to take effect next month, expanding financial transaction services to the channel.
The banking agent rules allow related institutions to appoint agents to offer financial services such as money deposits, transfers, withdrawals and payment. Loan distribution is not permitted through banking agents.
Banking agents, under the amended regulations, will be permitted to provide cash withdrawals of up to 5,000 baht per transaction and 20,000 per day per customer. The expanded scope of banking agents comes as the trend in the closure of physical bank branches accelerates amid the rising use of digital channels.
According to the Bank of Thailand's Puey Ungphakorn Institute for Economic Research (PIER), petrol stations are the banking agents with the highest potential in rural areas, as they can be reached within the shortest average radius: 5.4 kilometres.
This is followed by post offices at 7.6km, convenience stores at 7.8km and telecommunications company networks, along with cash top-up machines, at 13.6km.
Some 55% of villages lack access to formal financial services within a radius of 5km, while 30.6% have no access to financial services in any form within a radius of 5km, the central bank's think tank said. Given that 34% of villages have the potential to host banking agents, should all 200,000 potential banking agents manifest, only 21% of villages nationwide would be left unbanked.
Although BAY has plans to expand its services through banking agents, it will continue to open new branches to comply with the bank's midterm business plan covering 2018-20. The bank aims to increase its brick-and-mortar branch network to 685 nationwide by 2020, up from 663, Mr Ponganant said.
The 685 outlet number is the threshold the bank estimates will create economies of scale, he said.
At the same time, the bank will continue to expand its digital channel to keep pace with changing consumer lifestyles in the digital age.
Most of the new branches will be located in shopping malls and communities, which contribute positive growth of banking transactions compared with lower transaction growth of stand-alone brick-and-mortar branches.
BAY's mobile banking service, Krungsri Mobile Baking App (KMA), has also shown strong growth in terms of both user numbers and transactions.
There are currently 1 million KMA users.
BAY shares closed Friday on the Stock Exchange of Thailand at 44.3 baht, down 50 satang, in trade worth 15.3 million baht.








