Thailand’s virtual banking push may consolidate power of bigwigs

Thailand is on a virtual banking push that aims to improve financial access for the underbanked and boost competition.

The country has put three virtual banking licenses up for grabs to do just that, but the licensing process may reinforce the dominance of the country’s largest banks and conglomerates instead.

For instance, three of the five applicants for the licenses are leading Thai banks – Krungthai Bank, Bangkok Bank, and SCB X. These players have all paired up with some of the country’s most powerful conglomerates.

Three of the five applicants that have applied for the country’s first virtual bank licenses are leading Thai banks, which have partnered with major conglomerates. / Photo credit: image_vulture / Shutterstock

In theory, traditional financial institutions are expected to compete with virtual banks by expanding their market base and offering more attractive digital banking services. However, given that these incumbents are industry bigwigs, the goal of the country’s central bank – Bank of Thailand (BOT) – to increase competition could be tested.

“Three of the traditional banks have the opportunity to expand into a new segment [with the new licenses]. We might call this horizontal dominance,” says Pavida Pananond, a professor of international business at Thammasat University in Bangkok.

The licenses are expected to be issued in June 2025, and license holders may start operations starting sometime in 2026.

Prominent partners

In applying for the new license, Bangkok Bank, Thailand’s largest private commercial bank, has roped in the following partners:

• BTS Group, which operates Skytrain, Bangkok’s elevated mass rapid transit rail system, and the owner of media affiliate VGI
• Thailand Post, the country’s national postal service
• Saha Group, a consumer goods conglomerate
• Sea Group, known for Shopee and Garena

Meanwhile, Krungthai Bank, the largest state-owned bank, has formed an alliance with Gulf Energy and PTT Oil and Retail Business. Energy company Gulf Energy is the majority owner of AIS, Thailand’s largest GSM mobile phone operator, while PTT Oil and Retail Business is the retail and coffee shop arm of national energy company PTT.

SCB X, the holding company of SCB Bank, has joined hands with South Korea’s KakaoBank and WeBank in its bid for a license.

Photo credit: 123RF

The remaining two applicant groups are:

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