The cabinet on Tuesday approved in principle a draft digital ID bill to facilitate transactions and ensure security for online users, a move that bankers believe will help banks expand their account base through the internet and smartphones at a rapid pace.
According to government spokesman Sansern Kaewkamnerd, the bill will stipulate criteria, means and conditions for businesses using the digital ID platform and directives on how to protect people who own information.
"Currently, several transactions or contracts require personal identification or authentication, and the identification process needs the users to show their identity to the service providers and submit many documents," Mr Sansern said. "The new law, once enacted, will facilitate and expedite the processes of such identification, and if digital ID can be authenticated it will benefit both service users and service providers."
The draft bill also requires establishment of a 12-member committee to supervise the digital ID platform, to be chaired by the digital economy and society minister with the permanent secretary functioning as vice-chairman.
The Office of the Electronic Transactions Commission will act as the secretariat office of the committee.
The committee will be tasked with supervising the digital ID platform and issue criteria and requirements for companies using the platform and impose fees and handling charges involving digital authentication and identification.
Mr Sansern said the system will become operational only when providers have been incorporated and awarded an operating licence by the digital economy and society minister.
Companies are also required to draft confidentiality standards and safety information for the digital ID network.
Mr Sansern said the new law, once enacted, will improve the experience of those performing transactions or using the services of banks or state agencies.
In the event that operators cause damage to users, the draft bill requires operators to be fined up to 300,000 baht, plus 10,000 baht a day if there is no improvement.
Some banks have already implemented the electronic Know Your Customer (e-KYC) to provide customers with more convenience, speed and security.
The e-KYC system uses facial recognition software to verify personal identity online when a user opens a new deposit account.
With the technology, customers are allowed to open a deposit account through an e-banking service without going to a physical bank branch.
The digital ID bill, likely to come into force next year, enables people to open accounts and seek lending via the internet or a smartphone, said Finance Ministry spokeswoman Kulaya Tantitemit.
As current laws require a user's identification and signature in making transactions, the person must show up at service providers such as state agencies, banks and hospitals, causing a burden for both users and providers, Ms Kulaya said.
"People will be able to open bank accounts and request lending through electronic channels without showing up in person at bank branches," she said.
Bangkok Bank (BBL) executive vice-president Prassanee Ouiyamaphan said BBL is one of the large banks that completed an e-KYC trial in the Bank of Thailand's regulatory sandbox.
After the central bank announces regulations to reinforce the digital ID bill, BBL is expected to implement e-KYC though facial recognition by October.
The bank's customer authentication through e-KYC is for both its own and cross-bank databases. In the initial stage, BBL plans to verify customers through e-KYC technology on the mobile banking platform for new deposit accounts.
BBL expects tens of thousands of new deposit accounts to open within six months of the new service becoming available on the digital platform, Mrs Prassanee said.
BBL has 17 million deposit accounts.
The service will be extended to digital lending next year, Mrs Prassanee said.
Thakorn Piyapan, head of digital banking and innovation at Bank of Ayudhya (BAY), said the bank has completed e-KYC testing in the central bank's sandbox for its own customer data verification and continues to test cross-bank data verification.
BAY plans to roll out digital deposit account openings and lending in October and November, he said.