BAY doubles capacity for mobile banking transactions

BAY doubles capacity for mobile banking transactions

Bank of Ayudhya (BAY), the country's fifth-largest commercial bank by assets, has doubled its mobile banking transaction capacity to keep pace with booming online volume and to comply with Thai Bankers' Association (TBA) measures to prevent a future system crash.

The bank plans to introduce new mobile features next year, said Thakorn Piyapan, head of digital banking and innovation.

Digital lending is among the features expected to be rolled out in the first or second quarter next year. Digital lending will be officially launched after the adoption of digital ID, Mr Thakorn said.

BAY is among the local banks testing out e-Know Your Customer (e-KYC) technology in the central bank's regulatory sandbox. Once e-KYC is allowed by the Bank of Thailand, opening new deposit accounts will be available on KMA -- BAY's mobile banking app -- before adding digital lending in the next stage.

"Digital lending will be a key area in which banks will compete intensely next year," Mr Thakorn said.

Following the digital transaction fee waiver and the increase in online transactions, banks have been competing for larger customer bases through customised products, aiming for new income streams.

Mr Thakorn said competition will likely cover pricing, marketing campaigns and business partnerships.

BAY has adopted a pricing structure based on the risk profile of borrowers.

The bank is the market leader in personal loan products, operated by its unsecured loan arm, Krungsri Consumer. Its interest rates for loan products average 21-22%, compared with the 28% ceiling allowed by the central bank.

With the risk-based pricing of its digital lending service, the average interest rate would be lower than the current rate, said Mr Thakorn, who is also chairman of Krungsri Consumer.

Artificial intelligence should boost business efficiency and lower expenses, particularly operating and customer acquisition costs, allowing banks to offer reasonable prices and facilitate digital lending, he said.

Krungsri Consumer has developed the online channel for personal loans, but it still represents fewer than 10% of new loan applications. The digital lending app is expected to comprise 15% of new personal loan applications, reaching 30% in the next few years, Mr Thakorn said.

After a mobile banking crash that delayed millions of transactions at the end of August, the TBA has worked to double capacity for banks' financial transactions, also aiming to upgrade the National Interbank Transaction Management and Exchange Co, the local switching system provider, to avoid future outages.

BAY shares closed Friday on the Stock Exchange of Thailand at 40 baht, down 25 satang, in trade worth 4.5 million baht.


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