Line BK, a social banking platform collaboration between Kasikornbank (KBank) and Line Corporation, plans to add local partners to strengthen its digital ecosystem beyond finance to access a larger customer base nationwide.
Local data is a key factor for accessing new clients and the company is focused on underbanked and unbanked customers whose monthly income is below 30,000 baht.
As a result, local companies with large databases of clients, especially those in the telecom, retail and healthcare sectors, should facilitate Line BK's search for new customers, according to the company.
Line BK has been dealing with some local partners on customer expansion and new service development.
The company partnered with telecom operator Total Access Communication Plc (DTAC) and is offering digital loans to more than 10,000 DTAC customers as part of a pilot project.
Tana Pothikamjorn, chief executive of Kasikorn Line, said Line BK has a total of 540,000 digital loan accounts, covering personal loan and nanofinance products.
He said the company aims to increase both loan accounts and total loan portfolio to above 20 billion baht this year. However, Line BK has not set a specific target for 2022 because it is awaiting clarity on an economic outlook, particularly for the country's tourism recovery.
The company's target group is the mass market.
Line BK is waiting for an economic recovery to improve customers' income and their ability to make debt payments.
The company has been tightening loan criteria since last year in line with the economic situation amid the Omicron variant.
Given the tighter loan criteria, its loan approval rate declined to lower than 10% of total applications. Kasikorn Line hopes the economy will continue to recover, increasing its loan approval rate to around 20%, Mr Tana said.
The company's non-performing loans (NPLs) increased from December last year to January this year because customers paid more attention to spending during festivals rather than debt repayment, he said.
Debt payment has been normalising since the New Year festival, and the company's NPL ratio is now manageable at around 4%, said Mr Tana.
Kasikorn Line is monitoring the Bank of Thailand's virtual banking policy and it offered the institution some opinions on the subject, he said.
If the central bank offers a virtual banking licence, the market would have more players and should see intensifying competition for digital banking services, said Mr Tana.
He does not believe more digital banking players will lead to a sharp decline in banking service fees, in part because there is strong competition now.
Existing players, both banks and non-banks, are able to provide financial inclusion because Thailand ranks No.1 globally in terms of mobile banking users with 83 million accounts in 2021, while the total number of Line BK users stands at 4 million, said Mr Tana.
In related news, Siam Commercial Bank (SCB) announced yesterday a US$100-million strategic investment in Akulaku, Indonesia's leading digital financial solutions provider.
The strategic investment and partnership highlights the growth of e-commerce across Southeast Asia and heralds a new step in the digital banking revolution, said SCB.