Singapore-based tech group Sea has applied for a digital banking license in Thailand, continuing its expansion into the financial services sector across Southeast Asia. Sea’s bid follows its earlier ventures into digital banking in Singapore, Indonesia, and the Philippines. A digital banking license allows the holder to operate various financial services, such as taking deposits, lending, and managing assets, without physical branches.
This enables operators to offer loans with low-interest rates, making it easier for consumers, especially underbanked people, to access these services. Sea’s move is part of its broader strategy to leverage its existing e-commerce and digital payment platforms, like Shopee, to provide a seamless banking experience for its users. By integrating digital banking services, Sea aims to enhance financial inclusion in the region, offering easy access to financial products for a larger population.
Sea is one of five applicants that have submitted bids for a virtual bank license in Thailand, according to Somchai Lertlarpwasin, Assistant Governor of the Financial Institutions Policy Group at the Bank of Thailand (BOT). The submission window closed on September 19, 2024, following a call from the Ministry of Finance and the BOT for interested parties to apply. Other prominent contenders include a consortium led by Gulf Energy Development, which includes Krungthai Bank, Advanced Info Service, and PTT Oil and Retail Business, as well as the SCB X consortium, which has partnered with KakaoBank, South Korea’s largest digital bank, and WeBank, China’s first digital-only bank.
Ascend Money, a financial technology firm backed by the Charoen Pokphand (CP) Group and supported by Ant Group, is also expected to be in the running.
Sea expands into Thai digital banking
The BOT will assess the applicants based on their qualifications, potential, and capacity to operate a virtual bank, in accordance with the Ministry of Finance’s guidelines issued on March 4, 2024.
The evaluation will also consider the benefits to the Thai economy and the stability of the financial system. The list of qualified applicants will be submitted to the Minister of Finance for approval, with an official announcement expected by mid-2025. Once approved, successful applicants will have one year to prepare for the launch of their virtual banking operations.
The Bank of Thailand plans to issue three virtual bank licenses initially, despite the Ministry of Finance suggesting there may not be a cap on the number. To qualify, applicants must have a minimum registered capital of 5 billion baht, which will later increase to 10 billion baht. In another development, Lighthub Asset, a Thai FinTech, and WeLab, a pan-Asian FinTech platform, have announced their application for a Virtual Banking license with the Bank of Thailand.
The consortium aims to revolutionize banking services in Thailand by delivering an AI-powered, intelligent experience, focusing on improving financial inclusion for underserved communities. M.R. Chatu Mongol Sonakul, Advisor of the Consortium and Former Governor of the Bank of Thailand, said, “I welcome BOT’s initiative to invite new market entrants to foster greater innovation and competition in the financial sector. I am confident that the consortium’s new virtual bank will bring fresh ideas and innovative solutions to advance financial inclusion for underserved communities and instill diversity in Thailand’s financial landscape.”
The result of Lighthub Asset and WeLab’s application is expected to be announced within the first half of 2025.
