Following this announcement, KakaoBank aims to obtain its banking license in order to run a digital banking platform from the central bank of Thailand. By partnering with the SCBX financial group, KakaoBank focuses on its overall plan for business expansion into the Southeast Asian economies and industries.
Thai customers will be given the possibility to conveniently access a wide range of financial services and products, with improved accessibility through technology.
More information about the partnership
The financial holdings company SCBX comprises multiple firms, such as the Siam Commercial Bank (a commercial bank based in Thailand), InnovestX Securities (a financial and investment solutions company), Card X (a credit card services enterprise), as well as others in order to provide its users and customers with efficient and secure financial solutions.
KakaoBank’s memorandum was inked after Thailand’s central bank issued a consultation paper regarding the licensing framework, which allowed digital banks to compete in the market in January. According to this framework, the Bank of Thailand was set to accept authorisation applications for internet banks, as well as grand licenses to a maximum of three companies by 2024. The licensed enterprises will be the first digital banks in the country and will be able to commence operations in Thailand by June 2025.
KakaoBank and SCBX are set to build a virtual bank consortium in order to acquire an internet-only banking license. After its establishment, KakaoBank plans to acquire a minimum of 20% of shares.
The memorandum represents a part of KakaoBank’s strategy of expansion around the world, particularly targeting the Southeast Asian market, after securing its fourth two-year term in March. In addition to Thailand, a highly promising candidate for the bank’s global expansion is represented by Indonesia.
The process of entering overseas markets was funded with a portion of the money raised by Kakaobank in 2021, from IPO’s (initial public offering) investment. According to the press release, approximately KPW 50 billion (USD 39,14 million) was allocated for the expansion of KakaoBank into multiple markets around the world.
Bank of Thailand’s development strategy
In June 2023, The Bank of Thailand revealed its plans to launch a retail
CBDC pilot in a regulatory sandbox in partnership with three payment providers. Initially, the bank planned to launch this project by the end of 2022, but it was faced with several delays. The three payment providers that were set to take part in the project were the Bank of Ayudhya (Krungsri), the Singapore-based payments service provider 2C2P, as well as Siam Commercial Bank. Each of the three entities developed its own application, which was planned to become available to select users and to offer access to a QR scanner and a wallet.
