Lending apps await digital ID upsurge

Thailand's digital lending via mobile banking applications is expected to blossom as large banks tap into lucrative growth as a result of the upcoming digital ID implementation.

The cabinet last week approved in principle a draft for digital ID, an endorsement that would facilitate online transactions and ensure security for users. The move is expected to help banks expand their account base through digital lending via the internet and smartphones at a rapid pace.

Bangkok Bank (BBL), Thailand's largest lender in the commercial banking sector, plans to launch digital lending services on its mobile banking app, Bualuang mBanking, in the first to second quarter of 2019.

Executive vice-president Prassanee Ouiyamaphan said the bank has been adopting mobile banking features, with digital lending services to be available for the bank's existing payroll clients during the initial stage.

The bank expects to offer personal loans via its mobile banking platform to 200,000 payroll clients, which represent 10% of the bank's total payroll customer base of 2 million.

Mrs Prassanee said BBL is conservative on personal loan growth. With strong risk management, the loan portfolio is quite small for the bank.

"In spite of digital ID implementation, the bank will expand lending via the digital platform carefully," she said.

Credit lines and interest rates for digital lending will be subject to the central bank's regulation.

Bualuang mBanking now has 6 millions users, and the number is expected to increase to 8 million by the end of this year. Banking transactions via the digital channel have continued to increase significantly, especially after banks waived fees on digital transactions.

Siam Commercial Bank (SCB), the country's second-largest lender and second-ranked player in mobile banking services, has granted personal loans via its mobile banking app, SCB Easy, worth more than a billion baht after just having introduced the digital lending feature at the start of this year

SCB senior executive vice-president Apiphan Charoenanusorn said the bank expects positive growth in digital lending this year after the enactment of digital ID.

With digital ID, the bank can verify customer identity with more convenience and security because of electronic Know Your Customer (e-KYC) technology. This will in turn foster growth in digital loans.

Apart from personal loans, customers can also apply for mortgages and auto loans through the application process on SCB Easy, Mrs Apiphan said, and the bank's staff will reply within an hour from the app.

She said that from the beginning of this year there have been an estimated 1.6 million clicks accessing the digital lending feature on SCB Easy, 300,000 of which were from digital loan applicants via the digital platform.

"Via digital, the bank can offer attractive interest rates depending on the borrower's risk profile from user data analytics," Mrs Apiphan said.

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