Digital Banks - Thailand

Thailand

In Thailand, the Digital Banks market market is forecasted to witness a substantial growth in Net Interest Income, reaching US$1.87bn by the year 2024.
Furthermore, there is an expected annual growth rate (CAGR 2024-2028) of 8.69%, which will contribute to a significant increase in market volume, estimated to reach US$2.61bn by 2028.
When compared globally, it is worth noting that in China will generate the highest Net Interest Income, projected to reach a staggering US$969,200.0m by 2024.
Thailand's digital banking market is experiencing rapid growth, with a surge in mobile banking usage and the emergence of innovative fintech solutions.

Key regions: United Kingdom, Japan, China, United States, Brazil

Definition:

Digital Banks refer to the emerging market for purely digital banks that offer financial services via online and mobile platforms. Unlike traditional banks, digital banks also known as neobanks, do not have store-based branches and instead rely on technology to deliver their services. But in contrast to digital-only direct banks, which focus on providing traditional banking services in an online format, the digital banks/neobanks covered in this analysis prioritize cutting-edge features and a modern user experience.
Digital Banks offer a wide range of financial products and services, including savings and checking accounts, credit cards, personal loans, and investment products, among others. They aim to provide a more convenient, accessible, and user-friendly banking experience by leveraging technology such as mobile apps and artificial intelligence. They also provide a digital identification and onboarding process, often via smartphone.
The Digital Banks market is growing rapidly as consumers increasingly demand more convenient, digitally focused financial services. Neobanks/Digital Banks are able to offer these services at a lower cost compared to traditional banks, as they have lower overhead costs and a more efficient operating model.
However, digital banks face challenges in building trust and establishing their reputation in the financial services industry. They must also navigate the complex regulatory landscape and comply with the same rules and standards as traditional banks.
Overall, the Digital Banks market represents a growing and exciting opportunity for financial services providers to deliver innovative and convenient solutions to consumers.

Structure:

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income as well as the number of ATMs.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the retail and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Bunq, Tomorrow, and Revolut.

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Analyst Opinion

The Digital Banks market in Thailand is experiencing a significant growth trajectory, driven by changing customer preferences, technological advancements, and favorable local circumstances.

Customer preferences: Customers in Thailand are increasingly seeking convenient and efficient banking solutions, leading to a rise in demand for digital banking services. The younger demographic, in particular, is more inclined towards using mobile apps and online platforms for their banking needs. The convenience of 24/7 access, quick transactions, and personalized services are key factors driving customers towards digital banks.

Trends in the market: One notable trend in the Thai digital banking market is the emergence of innovative fintech solutions and partnerships between traditional banks and technology companies. This trend is reshaping the competitive landscape and driving banks to enhance their digital offerings to stay relevant. Moreover, the adoption of artificial intelligence, machine learning, and blockchain technologies is enabling digital banks to provide more tailored and secure services to customers.

Local special circumstances: Thailand's rapidly growing internet penetration rate and smartphone usage are playing a crucial role in the expansion of the digital banking market. The government's initiatives to promote a cashless society and the increasing number of tech-savvy consumers are creating a conducive environment for digital banks to thrive in the country. Additionally, the regulatory environment in Thailand is becoming more fintech-friendly, encouraging new players to enter the market and drive innovation.

Underlying macroeconomic factors: The stable economic growth and rising middle-class population in Thailand are fueling the demand for digital banking services. As more people gain access to smartphones and the internet, the potential customer base for digital banks continues to expand. Moreover, the COVID-19 pandemic has accelerated the shift towards digital channels for banking transactions, further boosting the growth of the digital banking market in Thailand.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.