Ttb set to roll out nanofinance service in April

TMBThanachart Bank (ttb) is scheduled to introduce a nanofinance service next month, employing a risk-based pricing (RBP) approach in preparation for the central bank’s new lending model.

The service will be offered exclusively via digital channels, starting as a pilot project on April 1, said the bank.

According to president Thakorn Piyapan, ttb wants to leverage alternative data such as digital financial behaviour recorded through its ttb touch mobile app to assess loan applications.

The lending model will have a sixmonth trial phase as staff test the concept, he said.

Success in the pilot phase would lead to development of the RBP model, with the bank anticipating nanofinance services under this model to its payroll clientele, said Mr Thakorn.

RBP is part of the Bank of Thailand’s responsible lending (RL) approach, which began earlier this year.

Under the RBP model, the interest rates for loans would depend on each customer’s credit risk. The regulator previously allowed a ceiling interest rate for nanofinance of 33% per year.

As the country’s sixth-largest lender by total assets, ttb enhanced its mobile banking services and noticed a surge in digital banking transactions. Roughly 25% of its branch transactions have transitioned to mobile banking apps and ATMs, according to the bank.

Ttb touch has around 5 million users, of which 80% are active users. The bank has about 10 million individual customers.

Ttb anticipates adding 1 million new ttb touch users this year, partly driven by payroll clients, he said.

Mr Thakorn said the bank developed generative artificial intelligence to strengthen its business efficiency and reduce operating costs.

Leveraging this technology has led to a 30% reduction in debt collection calls, down from 2 million calls per month previously, he said.

In addition, ttb plans to launch a new mobile banking feature called “My Credit” that offers a novel lending model enabling retail customers to access loans under the RL approach.

In the initial stage, the new feature will be available for mortgage and car loan applications, said Mr Thakorn.

The feature allows applicants to demonstrate their debt repayment capability, after which the bank will determine a suitable credit line based on their credit score.

Following loan approval, customers have the flexibility to use the funds to purchase a house or car, depending on their individual risk profile.