BAY sets up new unit for digital banking
Bank of Ayudhya (BAY) has tweaked its three-year digital banking plan, deciding on a new subsidiary to oversee the business instead of upgrading its digital banking and innovation unit, says a senior executive.
The revised plan offers more flexibility for business expansion, he said.
Under the new model, the subsidiary will add 10 more employees to the 45 who will be transferred from the digital banking and innovation unit, said Thakorn Piyapan, head of digital banking and innovation.
The subsidiary model is in line with that adopted by its major shareholder, Bank of Tokyo-Mitsubishi UFJ.
The country's fifth-largest bank by assets also rejigged its investment plan in financial technology (fintech) companies by setting up a venture capital unit to invest directly in these companies and indirectly through foreign mutual funds, he said.
The bank initially had no plans to invest in fintech firms but sought to work with local corporate accelerators to seek applications developed by fintech companies to be run on BAY's online platform.
Mr Thakorn said the venture capital unit is expected to have registered capital of US$10-20 million, but the amount has not been finalised yet.
The venture capital unit is scheduled to be fully established by the end of this year.
Large and mid-sized Thai banks are keen on moving towards the digital platform to catch up with the fast-growing fintech industry, which could pose a threat to traditional banks.
Despite its focus on digital banking, BAY still needs to open more branches to create economies of scale.
The suitable number of branches may be around 700 nationwide from the current 644 in order to strengthen the bank's customer base and deposit base.
"We aim to be a top-tier bank, but our branch numbers are still lower than those of the big four players by about 50% on average. Branch expansion is still necessary but the pace of openings will be slower than in the past," he said.
The country's four largest banks -- Bangkok Bank, Krungthai Bank, Siam Commercial Bank and Kasikornbank -- have around 1,100-1,200 branches each nationwide.
BAY shares closed Friday on the Stock Exchange of Thailand at 39.50 baht, unchanged, in trade worth 29.9 million baht.