James Cronk, global director, Financial Services Industry, at US-based Cisco, said the banking and financial-services sectors were now “transferring their legacy environment into digital transformation to support digital payment”.
Around 4.5 per cent of Thai banking customers currently use digital payment, a proportion that will rise significantly in the next few years, driven by the development of information-technology infrastructure and security, he said.
Cisco’s comprehensive economic analysis estimates that digital innovation in retail banking will drive US$405 billion (Bt14.4 trillion) in value globally from 2015 to 2017.
Last year, financial services as a whole captured just 29 per cent or $117 billion of that opportunity.
Moreover, more than 90 per cent of the potential value is driven by key digital-use cases, including sales and services transformation, next-generation workers, video-based advice, mobile payment and connected ads, Cronk said.
Cisco has six platforms and solutions to support digital transformation in financial services – customer experience, workforce experience, agile IT-fast IT, analytics and insights, cyber security and liability, and risk compliance and management – the global director said.
Having a road map to digital value in retail banking means banks will be positioned “to enable IT agility and operational effectiveness, create differentiation in their business strategies from those of competitors, and define disruptive new digital-enabled business processes”, he explained.
Vatsun Thirapatarapong, managing director of Cisco in Thailand and Indochina, said the ratio of digital-banking users in Thailand would increase to 10 per cent of all banking users in the next three years, due to the popularity of using e-payment among generation-Z individuals, the usage of mobile first/cloud first, as well as start-ups developing fintech (financial technology) solutions to support digital payment.
Moreover, IDC has reported that consumers expect banks to deliver highly personalised hi-tech services coupled with the convenience of anytime, anywhere.
This group of consumers is growing and accounted for about 4.5 per cent of banking customers in the Asia-Pacific last year, according to the global IT market-intelligence firm, which expects the segment to grow to about 15 per cent by 2020.
Meanwhile, the Bank of Thailand has reported that there are currently around 12.9 million users of mobile banking in the Kingdom. The value of Thailand’s online retail market is expected to reach $10 billion-$15 billion by 2020, up from less than $2 billion last year, the central bank said.
The mobile penetration rate reached almost 87 per cent of the population, with smart-phone penetration at 50 per cent, while 50 per cent of all online transactions are done via mobile devices, it added. E-payments are expected to surge from Bt68.2 billion last year to Bt143 billion in 2020.
Moreover, Thailand is entering in the first stage of the government’s national e-payment policy and, when the e-payment system is fully operational next year, the estimated cost savings for banks and businesses will be around Bt75 billion per year, the Bank of Thailand said.
The Thai Bankers’ Association’s Payment System Office has agreed on a new fee structure, which will lower the cost of digital banking.