Bangkok – Lightnet-WeLab, a joint venture between Lightnet Group, a leading Asian financial infrastructure provider, and WeLab, a global FinTech company, announced its readiness to apply for a Virtual Bank license in Thailand. The group aims to elevate the Thai financial industry through advanced digital banking solutions, focusing on expanding financial inclusion to all customer segments, particularly the unserved and underserved, to drive sustainable growth in the country’s digital economy.
Lightnet-WeLab recently appointed Dr. Charlie Apisthametha, Chairman of Lightnet Group, as Senior Advisor. Dr. Charlie is a seasoned executive with deep expertise in Virtual Banking and extensive experience leading major organizations in Thailand, particularly in finance and technology. His leadership will be instrumental in driving and strengthening Lightnet-WeLab’s capabilities.
Virtual Bank: Transforming the Global Financial Landscape
Over the past five years, Virtual Banks have emerged as a game-changer, reshaping the global banking industry. They have set new standards for financial services, driving growth beyond traditional expectations.
Lightnet-WeLab believes that the rise of Virtual Banks in Thailand will stimulate financial innovation, enhance customer convenience, and broaden financial inclusion to cover all customer segments. This aligns with the Thai government’s and the Bank of Thailand’s policies to promote universal access to financial services.
Successful examples of Virtual Banks in other countries include Indonesia, a market similar to Thailand, where the number of Virtual Bank providers has been steadily increasing. This has expanded access to credit for unserved and underserved customers, with 15 Virtual Banks serving over 70 million account holders and achieving higher loan disbursements than traditional banks and other lending sources. The sector has experienced a growth rate of over 22%.
In Hong Kong, eight Virtual Banks licensed in 2019 have shown significant growth despite operating in a market with high bank account penetration. 30% of Hong Kong residents have opened accounts with Virtual Banks, and over the past three years, total deposits and loans have grown at an average annual rate of 77% and 147%, respectively. Small businesses have also benefited significantly from the increased efficiency offered by Virtual Banking solutions.
Many Virtual Banks globally have achieved remarkable growth in both size and significance. For instance, Brazil’s NuBank, the world’s largest Virtual Bank, boasts a market capitalization of 70 billion USD, surpassing the combined value of Thailand’s top four largest banks.
Building on the successful launch of two Virtual Banks in Indonesia and Hong Kong, Lightnet-WeLab is well-equipped to leverage its experience and expertise to serve the financial needs of Thai people and contribute to the advancement of the country’s financial industry.
Three Key Strategies for Financial Inclusion
Lightnet-WeLab is committed to driving financial inclusion in Thailand through three key strategies:
- Financial Inclusion: Setting new standards for banking services by reducing barriers to financial access, such as the minimum deposit requirement of 500 baht for opening traditional bank accounts, which can hinder access for some customer segments. Virtual Banks will increase competition and benefit consumers. For example, in Hong Kong, after Virtual Bank licenses were granted in 2019, many banks immediately removed minimum deposit requirements to adapt to the “new normal.” Lightnet-WeLab’s extensive ecosystem, with 46 million customers across various sectors, including agriculture, F&B, and e-commerce, along with over 150,000 offline customer service channels, will help reduce reliance on informal lending and create a financial world accessible to all in Thailand.
- Innovative Products: Differentiating from traditional banks’ one-size-fits-all approach by designing financial products tailored to the needs of unserved and underserved customers. For example, WeLab’s Virtual Bank in Indonesia, Saqu, offers “Saving Pockets,” customizable sub-accounts within a single bank account that enable users to effectively manage income and expenses for different purposes. This feature boasts a 60% monthly active usage rate, with nearly 2 million users in 12 months, 40% of whom are from the informal economy. This demonstrates the potential of designing products specifically for the unserved and underserved, a strategy Thailand can adopt to promote financial inclusion.
- Responsible Lending: Leading the market with responsible lending practices. Responsible lending is crucial for integrating the informal economy into the formal financial system. Over the past 12 years, WeLab has disbursed over 15 billion USD in loans across Asian markets. Its proprietary credit technology and risk-based pricing model, which determines interest rates based on individual creditworthiness and behavior, have resulted in lower delinquency rates than the market average. WeLab’s non-performing loan ratio was six times lower than the Hong Kong market average last year. Lightnet-WeLab will adapt WeLab’s AI-powered credit technology and risk-based pricing model to the Thai market. By processing multi-dimensional data and employing edge computing to assess risk, it can extend credit to borrowers who might be considered high-risk under traditional credit scoring models. For instance, drone-based image analysis with satellite data can identify high-yield farmers with good credit scores, improving the effectiveness of risk-based pricing.
Dr.Charlie Confident in Lightnet-WeLab’s Readiness to Launch Virtual Bank Within 12 Months
Dr.Charlie Apisthametha, Chairman of Lightnet Group and Senior Advisor to Lightnet-WeLab, said, “My dream is to see all Thais escape the debt cycle and achieve financial freedom and stability, which good banking services can facilitate, especially with the technological advantages of Virtual Banks. With our expertise in building Virtual Banks across Asia, if we are granted a license, we are confident in our ability to deliver services to customers within 12 months, offering suitable financial products and AI-powered solutions to bridge the financial gap for the unserved and underserved, particularly in the retail and MSME sectors in Thailand. I look forward to leading Lightnet-WeLab into the Thai market and working closely with the Bank of Thailand to create a brighter future for the country’s financial industry.”
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