Thai Bankers’ Association: New Fee Structure and Digital Shift

The Association of Thai Bankers (TBA) is considering to introduce a revised fee structure in the banking sector, which might result in elevated service charges for banks, potentially affecting customers.

The president of TBA, Payong Srivanich, indicated that the association’s bank members have discussed a revised fee format that aligns with operational costs.

Before finalizing this new fee structure, banks aim to weigh the operational costs of both conventional and digital banking services, including dialogues with the Bank of Thailand.

Mr. Payong said that the current fee system for banks is unfair and does not match their costs. He explained that branch services are more expensive, but banks do not charge customers for them.

Furthermore, he pointed out that Thailand is the only country in the world that doesn’t impose a fee for digital transactions.

Banks have made substantial investments in technology infrastructure, including security systems, which in turn escalate costs for the sector, Mr Payong mentioned. Mr Payong also holds the position of CEO at Krungthai Bank (KTB).

“Higher costs may pass through to customers at reasonable prices. With a new fee structure, banks would gradually balance the fees charged for each channel, transitioning from a cash-intensive society to a cashless society in the long term,” he stated.

In a related development, KTB recently joined hands with Fidelity International, an established global investment manager boasting a track record of 50 years, operating across more than 25 locations and overseeing investments valued at US$728 billion.

The primary objective of the collaboration between the two firms is to enhance their wealth management capabilities.

Fidelity, through this partnership, offers KTB comprehensive support in different domains, including the delivery of investment products, advisory services, and market insights, thereby aiding the bank’s business growth.

KTB, being the third-largest bank in the country by total assets, intends to double its wealth customers in three years. The bank currently serves approximately 200,000 wealth clients, managing assets exceeding 2 million baht.

Focusing on wealth technology development, the bank also presents investment products through the Pao Tang and Krungthai NEXT mobile applications.

“The wealth management business has high market potential. This partnership and our wealth tech strategy, as well as more than 40 million digital users, should facilitate the bank’s business expansion significantly over three years,” Mr Payong pointed out.

Rajeev Mittal, Fidelity’s managing director for Asia-Pacific excluding Japan, mentioned that Southeast Asia holds strategic importance for Fidelity, which has been catering to clients in this region for over two decades.

This alliance enables Fidelity to leverage its extensive investment management expertise in the Thai market, he stated.

Regarding the application for the new virtual bank licence from the central bank, Mr Payong mentioned that KTB is interested but is awaiting the forthcoming regulations, expected to be released in the year’s third quarter.