Agents to lead unbanked drive

Aim to better serve those in remote areas

The two biggest digital banking players, Siam Commercial Bank (SCB) and Kasikornbank (KBank), plan to use banking agents as an additional channel to access the unbanked, helping to plug the gap before the full-scale adoption of digital banking.

SCB plans to use banking agents to process financial transactions related to money deposits and withdrawals, said Sarut Ruttanaporn, senior executive vicepresident and head of the retail segment and branch network. It will take some time for the bank to see large-scale digital banking transactions, though SCB is aggressively making the digital transition, said Mr Sarut.

Banking agents are poised to be an additional channel providing access to unbanked people, who largely live in remote areas and are not familiar with online transactions, he said.

There is a time lag in transforming to digital banking and a cashless society, and banking agents can help bridge that gap, especially for cash services, in addition to the bank’s branches, said Mr Sarut.

“Even though branches and cash transactions are declining as digital transactions rise, cash remains king for financial and payment transactions,” he said.

SCB’s total transactions in February increased by 30.3% year-on-year, mainly propelled by the digital channel, which saw a big jump of 187%. Electronic banking — ATMs and cash deposit machines — in February rose 7.1%, while branches transactions fell 6.3%.

The bank’s mobile application, SCB Easy, is the second-largest mobile banking app, behind K Plus from KBank, with 8.1 million users.

SCB aims to increase the number of SCB Easy users to 10 million by year-end, up from 6.5 million.

The central bank’s amended banking agent rules will permit banks to appoint agents to offer financial services comprising money deposits, transfers and withdrawals and payment. But loan distribution services are still not allowed through banking agents.

Banking agents will be able to provide cash withdrawals of up to 5,000 baht per transaction and 20,000 per day per customer. The expanded scope of banking agents comes as the trend in the closure of physical bank branches accelerates amid the rising use of digital channels.

Mr Sarut said the fee waiver for online transactions is not a primary factor in SCB’s banking agent move, adding that the provision of financial transaction services through several channels will meet the needs of each customer segment.

In the meantime, KBank president Patchara Samalapa said the bank is in talks with some potential banking agents, negotiations for which are expected to be finalised soon.

Apart from the types of financial services to be offered through agents, using them in other ways like back-office systems and IT infrastructure linkage with the bank also needs to be considered, he said.

For KBank, financial transactions via banking agents will be the same as through the branch channel, said Mr Patchara.

SOMCHAI POOMLARD the TAT expects to see 10 million people travel to localities in 55 provinces this year and generate 10 billion baht in income for communities. The campaign will also help boost overall domestic tourism income, which TAT has targeted at 1.3 trillion...