Deputy Prime Minister Somkid Jatusripitak has instructed Government Savings Bank (GSB), Krungthai Bank, and SME Development Bank to plug their databases into the big data analytics systems to design loan products that match the risk profile of each retail borrower.
Adopting data analytics technology is aimed at beefing up the state-owned banks' competitive edge preemptively, to be able to hold up against the inevitable entrance of technology behemoths in the future.
Banks will no longer be sleeping partners in the future as their competitors will be information firms that understand the behaviour of each retail customer, he said. Take non-life insurance companies as an example -- they can use a driver's behaviour to determine their driving risk, said Mr Somkid.
It is essential for financial institutions to rapidly adapt to the fast-changing technology and maintain their competitive advantage, he said.
He requested GSB sponsor and hire big data experts to design the system.
GSB is a state-owned bank that delivers high profits and it should earmark some money to develop technology and create an institution to help the general populace, said Mr Somkid. He said the bank must cut down investment in unnecessary businesses and use the profit to help facilitate the change in Thailand.
The bank, which has a close relationship with the poor, should set up the institution to cooperate with education institutions to provide education and training to those who need it, said Mr Somkid.
Such institutions will work to solve the problems of poverty, he said.
The bank should split their divisions into five clusters: the grassroots level, small and medium-sized enterprises (SMEs), middle-class consumers who want to upgrade, startups and the elderly, said Mr Somkid.
In the meantime, GSB president and chief executive Chatchai Payuhanaveechai said eight state-owned banks plan to link their database systems to big data analytics to analyse customers in the SME, agricultural and grassroots segments.
GSB and the Bank for Agriculture and Agricultural Cooperatives have almost 50 million customers, providing a lot of data to be analysed, he said. However, customers must consent to having their data used in order to comply with privacy laws.
GSB recorded a net profit of 31.2 billion baht in 2017, up from 25 billion in 2016.