BAY lines up fee waiver replacements
Bank of Ayudhya (BAY) expects new service channels, including banking agents and digital platforms, to generate fee-based income to compensate for waived digital transaction fees.
Banking agents and digital platforms are the latest fee-based income sources for the bank over the long term, said Phonganant Thanattrai, head of the retail banking and distribution group.
The bank aims for 10% growth in fee-based income for retail banking business, both this year and next.
BAY, the country’s fifth-largest lender by assets, has offered fund transfers through its banking agent channel, Boonterm machines, for two months, Mr Phonganant said, and transactions have outpaced expectations.
The bank's money transfer transactions are available at 120,000 Boonterm machines nationwide. The channel targets low-income earners.
The country’s largest top-up machine provider under the Boonterm brand is operated by MAI-listed Forth Smart Service Plc. BAY has also offered basic transactional banking services at another agent, Thailand Post, for several years through 2,000 outlets across the country.
Mr Phonganant said the bank is in talks with potential partners, including telecommunications and retail businesses, to be banking agents. The deal is expected to be concluded by the March quarter next year.
The bank wants to expand the banking agent channel to access unbanked customers, he said.
"Basic banking transactions, especially money deposits, fund transfers and bill payments, are our key focus to be provided through the channel," Mr Phonganant said. "The bank has no plans to offer complicated services such as loans at our banking agents."
Digital platforms are another key channel to contribute to fee-based income.
Mortgage digital lending will be available on BAY's mobile banking app, KMA, next year, in addition to personal digital lending.
Mutual funds and bancassurance services will also be available at KMA.
There are 4 million users of KMA, with an aim to increase the figure to 4.1 million users by the end of the year.
In traditional channels, mutual fund businesses contributed to a whopping 26% year-on-year fee-based income growth during the first nine months of the year, while bancassurance delivered 16% fee income growth over the same period.
Mr Phonganant said digital financial services will gradually replace digital money transfer transaction fees, while the bank has felt minimal impact from online bill payment fee waivers, with 5-10% of total bill payment income being wiping out.
BAY shares closed Friday on the Stock Exchange of Thailand at 40.75 baht, up 50 satang, in trade worth 11.2 million baht.