Bank of Ayudhya (BAY), the country's fifth-largest bank by assets, will take part in parent Mitsubishi UFJ Financial Group's (MUFG's) massive investment deal in Grab, in a move to gain greater access to customers through the Southeast Asian ride-hailing giant's platform.
The Thai bank will invest through its financial technology venture arm, Krungsri Finnovate, said Thakorn Piyapan, head of digital banking and innovation at BAY.
Krungsri Finnovate will be a minority investor, he said.
MUFG, Japan's largest financial institution, is set to pour more than US$700 million in Singapore-based tech unicorn Grab as part of a strategic collaboration targeting access to millions across the region who use the mobile app to book cars and meals, according to foreign media outlets.
"Under the collaboration, we plan to synergise the strength of Krungsri [BAY's marketing brand] and Grab in the quest for new banking business opportunities on the digital platform," Mr Thakorn said.
Kasikornbank (KBank), Thailand's biggest lender by assets and the largest digital banking service provider, also invested in Grab with $50 million in November 2018 and partnered with the ride-hailing firm to set up e-wallet GrabPay. The bank has also used Grab data to offer digital loan services to Grab drivers as a pilot project.
KBank co-president Patchara Samalapa said his bank will maintain its investment in Grab but has no plans to inject additional funds into the platform giant.
Funding will not be a key focus under the collaboration, but business strategies and customer acquisition and engagement are important factors to allow the bank to search for new opportunities and expand digital banking business.
"We aren't concerned that Krungsri will also join and offer financial services on the platform," Mr Patchara said. "The bank will concentrate on its own business development."
KBank also has no plans to invest in other global platform partners, as teaming up with Grab, Line and Facebook affords more business opportunities in digital banking services for the longer term.
KBank partnered with Line Financial Asia to form a joint-venture company, Kasikorn Line, in which the Thai bank owns at least 50%.
Mr Patchara said the bank plans to officially roll out digital loans through Line and Facebook in the second quarter this year after a soft launch and infrastructure development last year.
KBank lacks a specific business target for each platform. The bank is focused largely on sustaining the digital infrastructure base and building up customers' familiarity with the innovative financial service, Mr Patchara said.
The bank plans to expand consumer finance by 178 billion baht this year, partly through digital loans, he said.
BAY shares closed Friday on the Stock Exchange of Thailand at 28.25 baht, unchanged, in trade worth 5.6 million baht.