Banking agents will increase consumer access to financial services by 34%, with more than 200,000 of them potentially setting up shop nationwide, says the central bank's think tank.
Some 55% of villages nationwide cannot access financial services from the formal sector within a radius of five kilometres. But consumers can access potential banking agents, said Sommarat Chantarat, head of financial system research at the Bank of Thailand's Puey Ungphakorn Institute for Economic Research (Pier).
The institution surveyed 236,758 financial service points across the country, of which 35,410 were in the formal financial sector, 9,682 were in the semi-formal financial sector, 3,113 were in the informal financial sector, 29,878 were potential banking agents and 158,675 were electronic data capture (EDC) terminals.
Semi-formal financial service providers are cooperatives and pawn shops; informal financial service providers are professional and community groups; and potential banking agents include post offices, petrol stations, convenience stores, telecommunication company networks, cash top-up machines, villages and merchants with EDCs.
Mrs Sommarat said 34% of villages have potential banking agents, which would leave only 21% unbanked.
But around 30.6% of total villages are classified as banking deserts, which have no access to financial services via any channel within a radius of 5km.
"For the banking desert, we should support financial services via digital channels. Financial service accessibility shouldn't be limited to the expansion of physical service points," she said.
The survey, held in the second half of 2016, also discovered inefficiency in ATM usage. A large number of ATMs are concentrated within a radius of 5km, particularly in Bangkok's Silom and Siam Square areas. The overlap reflects inefficiency of the channel, creating higher operating costs for the banking system.
In the meantime, the section head for networking and communications, Atchana Lamsam, said ATM concentration has lead to the white label ATM concept, which the Thai Bankers' Association is studying.
White label ATM is a network pool that is run by a company instead of individual banks.
ATM overlap was also found at convenience stores, while both ATMs and convenience stores offer the same financial services, especially payments. The data would be useful for financial institutions that are considering selecting banking agents.
"We can find ATMs in front of convenience stores. If banks chose convenience stores as banking agents, the financial functions of the two channels should be different to increase efficiency," she said.
In Malaysia, the number of banking agents has grown significantly from 700 in 2013 to around 8,000 now, while key financial transactions are payments and deposits.