Big banks, conglomerates rule over Thailand’s fintech map

In Thailand’s fintech scene, a David and Goliath story unfolds differently. David does not defeat his giant nemesis. Instead, they call a truce and end up as partners.

If it isn’t clear yet, David here represents fintech firms, while Goliath stands for big banks and conglomerates.

In Thailand, a majority – or 51% – of fintech companies are either founded by the giants or backed by them.

A prime example is SCBX, the parent firm that also owns Thai banking giant Siam Commercial Bank. It has three fintech firms that it either owns or has invested in, and they are all in different verticals.

Unlike most conglomerate-backed fintech firms in other countries, however, those in Thailand don’t just invest; they develop the players themselves.

For instance, there are six other fintech players founded by conglomerates, as shown by data from Tech in Asia and Tracxn.

Banking on government support

The government’s campaign to transform Thailand into a cashless country has played a part in its banking industry’s openness and aggressive investment toward fintech.

Since 2016, the Bank of Thailand’s regulatory sandbox has let firms roll out innovative and experimental financial products without full legal compliance. The sandbox period lasts 45 days.

The program has allowed big banks in the country to launch QR code payments as early as 2017, ahead of its peers in the region.

Fintech startups may have a hard time competing with established banks in Thailand. It’s because they’re up against incumbents that have built agile “digital twins” operating like startups, Chondalet Khemarattana, president of the Thai Fintech Association, said in a PwC report.

Blockchains beckon Thai fintech startups

The industry’s openness to advancements has allowed Thai fintech giants to innovate products at scale.

It has also pressured startups to offer something vastly different from what incumbents already have. To set themselves apart and attract investor attention, many have turned to blockchain.