Thailand’s Kasikorn Bank (KBank) aims to repeat its digital banking success in Vietnam, despite only having one physical branch in the country, compared to its 824 branches in Thailand.
KBank, ranked among Thailand’s top three banks by assets, received a banking license to open a single branch in Ho Chi Minh City, Vietnam’s economic capital, in November 2021, after a long wait and postponements due to the Covid-19 pandemic, the Banker reported.
However, KBank’s limited presence in Vietnam has not curtailed its ambitions. The bank aims to become one of Vietnam’s top 20 banks by assets, with an income of $400 million and a customer base of 13.2 million by 2027.
This target is based on Vietnam’s rapidly growing banking system, which has grown by 15% over the past five years, the country’s rapid economic growth, with an average of 8% over the past five years, and its large and mainly youthful population of 100 million, most of whom are already digital literate.
KBank’s executive vice-president, Chat Luangarpa, says that of the $400 million lending target, “It’s only 1% of the market, so not that much.” Vietnam currently has 48 licensed commercial banks, with more than 28 smaller ones that hold 1% of the total credit market (about $500 billion) or less.
KBank, which is the leading mobile banking provider in Thailand, has benefited from the State Bank of Vietnam’s decision to permit electronic know-your-customer checks, allowing banks to open new deposits without customers visiting a branch.
Upon opening in Vietnam in November 2021, KBank swiftly launched its KPlus cyber banking platform, a proprietary platform that has proved popular in Thailand. “Last year within nine to 10 months of launching KPlus we were able to grab almost 400,000 customers on the digital bank account,” says Mr. Luangarpa.
To facilitate its digital transformation, KBank set up its Kasikorn Business Technology Group (KBTG). KBTG is no stranger to Vietnam as it has been active in outsourcing IT innovations there for several years and is familiar with the country’s vibrant high-tech community. “Once we got the license, we decided to set up KTBC in Vietnam. Now we have about 80 staff, and we will expand it to hundreds,” says Mr. Luangarpa.
While Vietnam’s largest and most professional banks have been pushing their digital services, many of the smaller banks cannot yet afford the transition. KBank aims to capture a portion of the 1% of the total credit market in Vietnam currently held by smaller banks.
Related
Source: Vietnam Insider