BoT focusing on digital innovation
The Bank of Thailand (BoT) is developing the country’s financial ecosystem by balancing financial stability and technology development to transform the financial sector into the digital era.
In the past the central bank paid attention mainly on maintaining financial stability to build up a strong foundation for the local financial sector.
As digital technology has been developing rapidly and disrupting traditional financial services, all related parties, including the BoT, need to adjust in line with the change, governor Sethaput Suthiwartnarueput said at the central bank’s Bangkok FinTech Fair 2021 yesterday.
As a regulator, the central bank needs to support financial institutions to develop new innovative financial services and products to better respond to consumers’ and businesses’ demands in accordance with the digital age.
The BoT will also open all types of financial institutions including banks, non-banks and fintech companies to do business and grow businesses under the central bank’s fair treatment. At the same time, the regulator needs to supervise them to prevent financial risk in the digital era.
Amid fast changing digital technology and the entry of new players in the financial market, the BoT would balance more between financial stability and the digital technology development of financial institutions.
The central bank would also increase flexibility of financial system supervision, Mr Sethaput said.
For the financial stability, the regulator will pay more attention to financial institutions’ resiliency to handle risks.
The local financial system has been developing digital infrastructure positively, in particular via the payment platform PromptPay with 60 million registrants and transactions per day rising to 85 billion baht.
Mr Sethaput said that the digital banking development would also allow consumers and businesses to access financial services more easily and support economic expansion in the longer term.
Speaking at a separate event, Chayawadee Chai-Anant, the BoT’s senior director for the economic and policy department, said the central bank assesses that the Thai economy would gradually recover after bottoming out in the third quarter this year.
The central bank forecast GDP growth rate for 2022 would be 3.9%, picking up from its predicted 0.7% in 2021.
Economic expansion for next year will mainly stem from domestic consumption, hence the central bank has forecast the growth of domestic consumption at 3.4% this year and 5.7% next year.
The government’s latest announcement to relax containment measures of Covid-19 and the country’s reopening plan on Nov 1 would support domestic consumption next year, Ms Chayawadee added.
At the same time, the central bank will monitor the government’s implementation of economic stimulus packages in the fourth quarter to see how it contributes to economic activities and domestic consumption.