Anucha Laokwansatit, senior executive vice president and chief risk officer of SCB, said yesterday that Digital Venture had been assigned as a laboratory for turning ideas into practical solutions, while also playing an incubator role for new start-up businesses that lack sufficient funding.

The company has set up a fund of US$50 million (Bt1.76 billion), which is a huge amount when compared with the roughly $80 million-worth of overall funding in Thailand since the country has been supporting start-up businesses.

The investment will enable SCB to get an early lead on future trends, and how to manage them, he said, adding that if technology or cyber issues seemed likely to present a risk to the bank, it would be better placed to manage such risk.

Anucha is also head of the investment committee at Digital Venture.

SCB currently hires an outsourcing company to monitor for cyber problems at the bank, with the company having to hack into the bank’s system to locate defects.

“We don’t know yet whether Digital Venture will be able to apply technologies developed from start-up businesses with the bank, but SCB wants to make sure that the technologies [fintech] will not disrupt the bank’s business. If we know, we should able to manage the technologies,” he said.

While fintech will not disrupt the banking industry in the medium term, as current banking services are a matter of trust and confidence on the part of both depositors and borrowers, payments are a segment that will be affected by the arrival of fintech, he added.

Digital Venture will also invest in funds in Asia that are focused on fintech, as the region offers a close fit for SCB’s operations, while fintech in Europe or the US might not fit well with its operations, he explained.

The potential return on this type of investment is acceptable for the bank, although it will be lower than for other types of investment, Anucha said.

Direct investment, meanwhile, might take time because the bank has to conduct due diligence in any companies in which it is interested, he added.

However, Thailand should provide more potential opportunities than overseas markets for direct investment, as there are relatively few pure fintech companies already in existence, with most Thai operators still e-commerce businesses, he added.

Anucha said the bank expected the $50-million fund to be enough for Digital Venture investments for around 18 months.