The State of Open Banking in Thailand in 2021
Though no authorized rules on open banking presently exist in Thailand, the federal government’s digital push with the Thailand 4.0 technique and the introduction of the Private Information Safety Act (PDPA) final 12 months means that ‘a transition to open banking frameworks is inevitable.
In comparison with Singapore and Malaysia, Thailand lags behind on open banking, with neither the central financial institution nor the regulator having issued a framework or tips but.
As a substitute, the federal government had the broader ambition to raise Thailand into an more and more superior digital era. In 2016, she launched Thailand 4.0, a enterprise mannequin venture centered on innovation and high-level providers, powered by cutting-edge digital know-how.
This was subsequently adopted by quite a few initiatives by the nation’s central financial institution, the Financial institution of Thailand (BOT), the Securities and Change Fee (SEC), and the Workplace of the Insurance coverage Fee (OIC) to hurry up l innovation within the banking, monetary and insurance coverage sector. .
BOT launched the fintech regulatory sandbox in 2016, which was adopted a 12 months later by the introduction of digital fee regulation. Digital funds regulation goals to stimulate fintech innovation by offering a framework for the availability of digital cash and digital fee providers. The BOT has additionally piloted the Nationwide Digital Fee Grasp Plan, which incorporates, amongst different targets, the event of the PromptPay nationwide fee infrastructure and its linkage with different Southeast Asian fee networks akin to PayNow. in Singapore.
On the identical time, the Workplace of Insurance coverage Fee launched its insurtech sandbox in 2017 to permit incumbents and different market gamers to check revolutionary merchandise.
Thailand’s SEC has to this point taken two major initiatives: in June 2017, it launched a sequence of sandboxes for securities, derivatives, clearing homes, know your buyer (KYC) initiatives and e-commerce, and in January 2018, it launched an API portal for data on monetary merchandise, alternate charges and extra.
Since Thailand launched into its digitization journey, the nation has skilled a transition to a cashless financial system, based on on the Ministry of International Affairs. Cellular and web banking transactions grew by 83% in 2016, with cellular and web banking providers accounting for 33% of the whole fee transaction quantity, a pointy enhance from simply 8% in 2010.
Open banking market initiatives
Regardless of little or no dialogue of regulating open banking in Thailand thus far, banks are proactively launching developer portals with open banking APIs, alongside authorities efforts to encourage innovation.
Bangkok Financial institution was the first financial institution in Thailand to do, launching its developer portal in January 2017. Initially, the portal contained solely 4 APIs but it surely nonetheless paved the best way for different banks within the nation, notably Business Financial institution of Siam, Kasikorn Financial institution and Ayudhya Financial institution (Krungsri), to develop comparable platforms to encourage innovation.
On the identical time, these banks are launching new services and products linked to open banking and which use APIs. For instance, Krungsri advert in July 2018, he had developed a brand new app for mortgages as a part of a wider vary of digital options. Designed for enterprise companions, together with actual property builders and actual property search portals, these options are meant to be provided with API entry to mortgage functions.
In the meantime, Siam Business Financial institution has taken a extra collaborative method, partnering with social media group Line Thailand in Might 2018 to allow person companies to seek for notifications of deposits, withdrawals and card spending. It additionally partnered with Mall Group in August 2018 to launch quite a lot of new banking and monetary providers, a number of of which make the most of the financial institution’s APIs.
From Kasikorn Financial institution, the financial institution mentionned by January 2020, greater than 50 associate firms had linked to its API system.
These efforts coincide with the implementation of the Private Information Safety Act (PDPA), new laws launched in Might 2019. The PDPA, which is able to come into full power on June 1, 2021, requires that knowledge controllers and processors who use private knowledge obtain the consent of knowledge homeowners and solely use them ‘for expressed functions.
Primarily based on experiences within the UK, European Union (EU) and Australia, client knowledge laws is usually step one in implementing open banking. In accordance with evaluation In accordance with know-how and administration consultancy Capco, these latest developments in Thailand recommend that an open banking framework could also be imminent.
In Australia, the introduction of the Client Information Proper (CDR) on July 1, 2020 noticed the launch of the primary section of open banking. Within the EU, the revised Fee Companies Directive (PSD2) mixed with the Normal Information Safety Regulation (GDPR) obliges banks to open and shield their prospects’ knowledge.