The most important part of financial inclusion is providing safe and secure fintech solutions; otherwise, we will be playing with the lives of poor people, says Chetna Sinha, founder of India’s first rural women’s bank, at a panel at Money20/20 in Bangkok on April 23.
The activist and social entrepreneur touched on a crucial topic at the global payments and fintech event, which restarted its Asia edition in Bangkok after a five-year hiatus: Financial inclusion.
During the intense heat wave that swept the city last week, two other events ran alongside the three-day Money20/20: Southeast Asia Blockchain Week (SEABW) and the real-world assets (RWA) conference OnChain2024.
Numerous Thai and major global banks joined Money20/20 alongside fintech institutions, corporations and government bodies. With around 3,000 attendees in its inaugural year, as part of a three-year plan for Money20/20 in Bangkok, the city’s potential as Southeast Asia’s next fintech hub comes under scrutiny.
Sinha (left): The most important part of financial inclusion is providing safe and secure fintech solutions. Otherwise, we will be playing with the lives of poor people. Photo: Money20/20
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“With some 60% of the world’s population based in Asia, it is a natural hub for innovation and cooperation. Thailand has been a regional digital leader, with key fintech objectives already set by the Bank of Thailand,” says Daranee Saeju, assistant governor of payment systems policy and financial consumer protection group, Bank of Thailand.
Money20/20’s managing director for Asia, Danny Levy, sees Thailand as “really representative” of the region. “A lot of the issues Thailand is facing, grappling with and overcoming like the underbanked and unbanked, financial inclusions, even the shift to digital and QR payments… there’s a lot of synergies there with the region.”
“Everyone [in Singapore] has a bank account. Everyone is used to digital payments,” adds Levy. “So we felt if we wanted to build an event for Asia by Asia, Thailand allowed us to do that.”
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Southeast Asia’s struggle
While Money20/20’s Western editions in Las Vegas and Amsterdam have focused on blurring the lines between humans and technology, its Asia edition marches to a different rhythm. Like much of Southeast Asia, Thailand harbours a substantial unbanked or underbanked population.
Like many parts of Southeast Asia, a significant segment of Thailand’s population remains unbanked or underbanked, with over 60% of its 71.6 million people falling into this category, according to Macquarie’s 2022 report. However, Thailand’s digitally adept populace, consistently ranking high in global mobile penetration rates, positions it as an ideal hub for fintech innovations.
Kanv Pandit, group managing director of banking solutions, Asia Pacific at FIS Global, describes Thailand as a “fast follower” of other markets experimenting with new technologies and products earlier. For example, banks have taken the social media digital experience to heart by investing to create food delivery platforms, merchant marketplaces and collaboration with ride-share companies. “The digital imperative is great and a great case for embedded finance.”
Kattiya Indaravijaya, CEO of Thailand’s Kasikornbank or KBank, highlights a different financial inclusion challenge. She notes that it is not merely about the availability of banking products but rather the pressing issue of household debt. The Institute of International Finance estimates this debt to be as high as 91.6% of the country’s GDP, far exceeding the “normal” proportion of around 60%. Conversely, KBank’s research reveals that less than a fifth of the population actively engages in financial planning.
Kbank, as the largest lender to small and medium-sized enterprises (SMEs) in the country, takes it upon itself to lift financial inclusion by promoting savings and investments. “And so sadly, before a customer wants to spend, [they] must have better spending and investment [understanding], not just for leisure,” she adds.
Perhaps Thailand’s first fintech unicorn, Ascend Money Group, has a better grasp of the young digitally savvy population and their struggles. The Ant-backed spin-off from telecommunications conglomerate True Corporation boasts 19 million active users each month, according to The Bangkok Post. In January, the TrueMoney digital wallet had 30 million users and targeted 35 million by year-end.
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The Bangkok Post also reported that in September 2021, the group reached a US$1.5 billion valuation following a US$50 million fundraising. Founded in 2008, the company aims to list on the Nasdaq in two years.
Ascend Money aims to offer financial services to the entire population by targeting specific market segments, such as the 6.5 million migrant workers and students aged seven to 12. Photo: Money20/20
Ascend Money’s co-president, Monsinee Nakapanant, says the group aims to offer financial services to the entire population by targeting specific market segments, such as the 6.5 million migrant workers and students aged seven to 12.
Still, the pace of TrueMoney’s expansion is not without risk, with growing incidents of online fraud and security breaches. Nakapanant says that while customers are responsible for owning their data, the company must secure it while providing the most frictionless user experience.
“That’s how we structure our product design. We have to make sure that the experience is very easy. At the same time, we invest in technology to help protect the user’s security,” she adds.
Regional fintech innovations
At Money20/20, KBank’s Indaravijaya stressed the importance of regional partnerships for financial inclusion. She urged stakeholders to capitalise on each other’s strengths. Numerous partnerships, especially in blockchain and Web3 products, were announced.
Starting next month, KBank and JP Morgan’s blockchain arm Onyx will commence testing project Carina, a blockchain-based cross-border payment and settlement system. This initiative will facilitate cross-border fund transfers in Thai Baht using Q-money, a form of Thai Baht e-Money on blockchain, to a US Dollar beneficiary account held at JP Morgan on JPM Coin. Transactions, which previously took 72 hours, will now be completed in just five minutes, available 24/7, 365 days a year, notes a KBank release.
Then, Sony Bank, a Japanese commercial bank, revealed a partnership with blockchain transformation company SettleMint. Together, they will embark on experiments to issue stablecoins linked to various currencies, including the Japanese yen.
HSBC also signed an MOU with the Thai Fintech Association to “further engage” the next generation of Thai tech unicorns and entrepreneurs. Finally, Standard Chartered launched its Open Banking Marketplace, a platform for existing and prospective clients to test application programming interfaces (APIs) that best meet their business objectives in a sandbox environment.
SCBX CEO Sutivon: We are now coming up from the so-called crypto winter and there’s a little bit of a re-emergence of the blockchain. Photo: Nicole Lim/The Edge Singapore
SEABW, an inaugural two-day conference hosted by Korean web3 venture capital firm ShardLab and its parent company, Hashed Inc, a blockchain-focused investment firm, took place at the same time as Money20/20.
Thai finance group SCBX and zkSync, a layer two Ethereum protocol co-founded by Alex Gluchowski from Matter Labs, were featured as top sponsors for the event.
Amid the emerging crypto spring and bull run, the atmosphere on day one of the conference at Iconsiam in Bangkok was energetic. “We are now coming up from the so-called crypto winter and there’s a little bit of a re-emergence of the blockchain and in some sense, we’re starting to see interesting use cases and practical, real-world cases coming out,” says SCBX CEO Arak Sutivon at the keynote panel.
Participants at the Southeast Asia Blockchain Week held at Iconsiam on Apr 24. Photo: Nicole Lim/The Edge Singapore
In 2022, SCB abandoned a US$500 million plan to acquire the Thai cryptocurrency exchange Bitkub. A report revealed that the deal would have consumed around 5% of SCB’s capital, surpassing the 3% limit set by the Bank of Thailand for commercial banks investing in digital asset businesses.
Touching on the same points of financial inclusion as the other panellists at Money20/20, Simon Kim of Hashed raised the opportunity for Web3 adoption to fill this gap. “Southeast Asia is the home of play-to-earn, starting from the Philippines, Vietnam and Thailand,” says Kim about the boom of the play-to-earn game Axie Infinity back in 2021, which left thousands of Filipinos in debt after suffering from a US$625 million hack. Yet, Kim believes the low-income environment in Southeast Asia is still well primed to grow income from blockchain gaming opportunities.
Yat Siu, the founder of game software and venture capital company Animoca Brands and a prolific investor of gamefi projects such as Axie Infinity, agrees. On the last day of Money20/20, Yat said at a panel that web3 and blockchain technology create financial inclusion for unbanked people. “There’s a whole economy, a whole system that’s happening in the world of web3 that is almost like a parallel universe to the physical world and most of it is happening in Asia.”
Fostering diversity
In 2023, it was reported that Thailand is taking inspiration from Singapore’s start-up ecosystem and will implement a tax incentive to promote the growth of its start-up industry.
The infancy of Thailand’s start-up ecosystem took centre stage during a Money20/20 panel featuring Thai food tech unicorn Line Man Wongnai and the country’s National Innovation Agency (NIA). A frequently mentioned statistic highlighted the nation’s roughly 100 start-ups, a number that has notably declined.
NIA’s director, Dr. Krithpaka Boonfueng, says the government strengthened funding for early-stage start-ups to attract more entrepreneurs. “The government has put a lot of budget in terms of funding and financial support in early-stage start-ups and the VCs have a lot of money to invest,” she adds. “But there are fewer start-ups in Thailand in which to invest. They are looking for foreign start-ups to invest in Thailand.”
Yod Chinsupakul, CEO of Line Man Wongnai, which raised US$265 million in 2022 led by Singapore’s sovereign wealth fund GIC and Japanese mobile app developer Line, says that his first-ever round of fundraising was the hardest without the help of the NIA back in 2011. “Today, if you have a start-up, you have much more support,” he adds.
Krithpaka underscores this shift, highlighting Thailand’s commitment to fostering diversity. She adds: “Thailand has a high percentage of women CEOs in entrepreneurship. We support many women CEOs and believe that innovation can be for men, women, [and members of the] LGBTQ and will be equal in terms of support from the Thai government.”
