Get to know Virtual Bank, branchless bank

With the popular trend of the digital world, innovations have begun to adapt to the modern era, even with banks transforming into virtual banks or branchless banks that have been in use overseas for quite some time. Earlier this year, the Bank of Thailand (BOT) considered opening branchless banks in Thailand. How will the old commercial bank change from the way it used to be? This time, ACU PAY will explain to you.

What is Virtual Bank?

The Virtual Bank is a new model of commercial bank with no branch. It will provide its services via online platform only. Many of you may wonder how the visual bank is different from Internet banking and Mobile Banking of a traditional commercial bank. In fact, Mobile banking and Internet banking are just one of the digital channels. However, if we want to open and close accounts, we have to do it at the bank, but being Virtual Bank, all financial transactions are done digitally.

Why is Virtual Bank needed?

  1. Increase access to financial services for households and small and medium-sized enterprises (SMEs), particularly credit services.
  2. To develop financial innovation and to promote new products and services that meet the needs of consumers.
  3. Increase efficiency and competition in the financial system.

Virtual Bank Service Characteristics

  • No branches and ATMs, but headquarters.
  • Provide services mainly via online channels.
  • Operating costs are lower than traditional commercial banks.
  • It is more flexible than traditional banks, and can quickly launch new types of financial innovations in line with changing consumer needs.
  • ฺBuild an efficient financial service experience.
  • There are no passbook deposit accounts. The account owner can divide the accounts into sub-accounts according to the purpose of the deposit.
  • Deposits will receive higher interest rates than ordinary deposit rates and may receive interest on a daily basis.
  • There are AIs that help guide savings and spending to suit the behavior of account owners.
  • Open an account easily just with a smartphone.
  • Loans made by borrowers do not have to show evidence of their income, and loans are approved quickly.
  • There are services for small SME entrepreneurs, such as linking deposit accounts with online accounting systems, etc.

Virtual bank in abroad

For foreign countries with Virtual Bank already existing, in England, Starling Bank is the UK’s first branchless commercial bank and Monzo, a branchless commercial bank that focuses on providing financial services to the younger generation. In Asia, The Republic of China has WeBank, a branchless commercial bank of Tencent (WeChat service provider), currently has more than 100 million customers. In Hong Kong, there are branchless banks such as Livi, a joint venture between Bank of China, JD Digits and Jardines, and Mox of Standard Chartered Bank. The last one in South Korea is Kakao Bank, which exceeded 1 million users within 5 days of its launch in 2017.

Does Thailand have a Virtual Bank yet?

Thailand is currently applying for the establishment of Virtual Bank by the end of 2023, which is expected to open in 2025. It is another important project of The Bank of Thailand (BOT). After the 1/2566 opinion hearing, the Bank of Thailand expects to grant no more than 3 licenses to establish a Virtual Bank as the BOT considers that it is a new business that has not yet existed in Thailand, so it should start from a small amount to be efficient and can be followed up effectively.

related articles