The message from an expert at the forefront of banking, finance, and insurance in Asia today is clear: organizations must adopt AI or risk becoming obsolete. Financial specialists have cautioned that relying solely on artificial intelligence (AI) does not guarantee a favorable return on investment. Instead, they emphasize the necessity of maintaining clean data, fostering industry collaboration, and practicing robust risk management to effectively navigate volatility.
At the Asian Banking and Finance and Asian Insurance Summit held today, industry representatives addressed the challenging financial climate in Thailand. This event, attended by over 220 participants, was hosted at the Renaissance Bangkok Ratchaprasong.
Warotai Kosolpisitkul, an International Economic Advisor from the Fiscal Policy Office in the Ministry of Finance, reiterated the country’s dedication to digital finance growth. He highlighted the effectiveness of QR code and code-based transactions, stating, “Thailand is proud to implement and broaden the use of national electronic payment systems,” which have significantly contributed to economic resilience during the COVID-19 pandemic. Furthermore, the Thai government is gearing up to introduce virtual banking licenses.
Baratan explained that once virtual banks commence operations, they can serve previously underserved populations, offering banking services at reduced costs and enhancing financial inclusion.
Christopher Saunders, a Partner and Head of Financial Services at KPMG Thailand, analyzed the impact of AI on financial services and stressed, “The stakes are high—embracing AI or being left behind.” He pointed to global data indicating that AI-driven efficiency could increase productivity by 19% to 23% of wage costs, as well as enhancing operational efficiency by 4% to 18%. However, he warned that the belief that AI will yield a positive return on investment is not always the case. In Thailand’s banking sector alone, he estimates that AI adoption could save approximately $1.4 billion annually through operational streamlining and customer service automation. Despite these estimates, rising customer service costs pose a challenge. “Customer experience scores are declining as banks struggle to meet the growing demand for hyper-personalized services,” he noted.
Naris Sathapholdeja, Chief Data & Analytics Group at TMBThanachart Bank PCL, shared his strategies to combat digital fraud, which continues to escalate in Thailand’s banking environment. In 2023, losses due to digital fraud and financial crimes exceeded $2.1 billion (THB 70 billion). He emphasized that fraudsters are becoming increasingly adept, often leveraging data on an unprecedented scale. According to him, “Criminal networks are highly data-focused, sometimes more so than banks themselves.” AI and machine learning models are being deployed to counter these threats, with effective preventative measures capable of reducing fraudulent activities by up to 30 times.
During a panel discussion moderated by Shin Thant Aung, Director at YCP, experts examined the evolving roles of financial leaders. Andrew Samaratunge, CFO of Generali Thailand, noted that while insurance lags behind banking in terms of digital adoption, customer demand for more transparency necessitates urgent action. Other panelists, including Pitorn Bee Phanaphat from Siam Commercial Bank, ARAPAT Sangkharat from Maybank Securities, and Phista Orasapiwat from HSBC, emphasized that transformational leadership must be grounded in practicality. They underscored the importance of combining technological proficiency with a deep understanding of customer and employee needs.
Thanat (Beng) Chamnanratanakul, an Associate Partner at Bain & Company, highlighted the challenges financial institutions face in these areas, as well as the opportunities created by technology. He pointed out that Thailand’s retail segments account for over 40% of total assets under management (AUM), with approximately 27% held in mutual funds. Despite this significant AUM, Belgium noted that penetration rates lag behind those in more developed markets like Hong Kong and Singapore, indicating room for growth.
Rauhan Bhalla, Director of Southeast Asia at CleverTap, emphasized the challenge posed by a shifting total addressable market (TAM). He mentioned that modern impactful channels such as social media significantly influence decision-making, asserting that “the way it changes for me may not be the same for you.” This highlights the necessity of generative AI and the need for clean data.
On the macroeconomic front, Kasikorn Bank’s Chief Economist Adulwattana Chisel expressed uncertainty regarding the global economy. He mentioned the potential risks posed by critical issues such as carbon emissions, cautioning that a global adoption of carbon taxes could jeopardize 30% of Thailand’s GDP.
In a second roundtable discussion on integrated finance, industry experts debated the increasing importance of integrated finance, alongside challenges related to data regulations and consumer trust. Moderated by David Uhlenbrock of Kearney, participants including Siripach Lahapattanapree of Ergo and Ben Assanassen of Thai Setakij Insurance highlighted that integrated finance is rapidly evolving, particularly in e-commerce and travel. However, they identified regulatory hurdles and the need for effective customer communication and adherence to data protection laws as significant obstacles.
Silvio Struebi from Simon-Kucher addressed the pricing and discounting challenges facing financial institutions. He identified three main issues: leading products driving income while others suffer from reduced pricing, a lack of real-time data on pricing causing inconsistencies, and pricing adjustments being reactive rather than strategically proactive.
The health system in Thailand faces sustainability challenges, particularly in balancing public funding, private insurance, and out-of-pocket expenses, as highlighted by Thomas Wilson, Director of Allianz Ayudhya PCL Insurance. Although not critical yet, these issues require attention to avert long-term financial strain. He remarked on the country’s reliance on government funding for health costs, with 70% financed publicly, while private insurance is growing due to rising incomes and the impacts of COVID-19, even as it remains a complex product.
In a third panel moderated by Struebi, speakers highlighted the necessity for transparent access to high-demand financial products, noting the significant role digital wealth management plays in enhancing efficiency. Panelists including Thiyachai Chong from CIMB Thai and Vikas Jain from financing companies advised banks to continually refine their digital strategies, balancing automation with human expertise.
Adisorn Hatairatana from Krungsri emphasized the need for advanced credit risk models in the era of virtual banking, identifying critical gaps in local analytics, industry academic collaboration, open professional discourse, and a culture of risk management.
The final panel, moderated by Kevin Kwek of SEA financial institutions, focused on Thailand’s readiness for virtual banking. Industry leaders discussed the need for strategic planning amidst global trends and local financial landscape changes. They noted that 79% of digital banks in Asia currently operate at a loss, with challenges in profitability underscoring the importance of avoiding pitfalls seen in other markets. Ittiphan Jearkjirm from Gulf Edge Company highlighted the necessity for new virtual banks to distinguish themselves in a market where consumers already utilize multiple banking applications, recommending the formation of solid consortiums aligned with shared strategic goals rather than merely pursuing marketing initiatives.