This is one of the most fascinating case studies of utilising blockchain technology for business. Krungsri was successful in offering the near real-time cross border funds transfer based on the Blockchain Interledger, the first-of-its-kind for the business sector. The Digital Banker spoke to Thakorn Piyapan, Head of Krungsri Consumer Group and Head of Digital Banking and Innovation Division Bank of Ayudhya (Krungsri) as he shares more about this project along with other important technological initiatives at Krungsri.
TDB: You were the 1st bank in Thailand to deploy facial recognition for deposit account opening – What other digital service capabilities can we expect from 2019-2020?
TP: Krungsri Mobile Application (KMA) is moving toward becoming the platform for the future financial world with innovations like open banking APIs, AI, big data & intelligence. Krungsri allocated over 800 million baht for KMA platform development. The key feature for the acquisition strategy is the digital opening of savings account, fund account, and securities investment account via the KMA platform, which enables digital ID verification and e-KYC to be transacted concurrently. From the second quarter of 2019 onwards, auto loan and home loan applications will be available on KMA, followed by PA, travel, and health insurance policy purchase in the third quarter.
KMA will serve as the marketing platform by means of e-Marketplace where a section of the platform will be dedicated for trade of products and services so as to boost the sales of our business partners. KMA e-Marketplace will extend their reach to existing and potential customers with special promotions while KMA users will enjoy attractive offers and discounts when they shop and pay for products and services on the KMA platform. Krungsri is confident that KMA e-Marketplace will serve as another key channel to promote and strengthen its relationship with Krungsri customers.
TDB: How do you see the Thai consumer banking landscape changing by 2020?
TP: The change in consumer banking landscape in Thailand will be significantly driven by the continuous disruptive technology which is the global phenomena. This disruption change lead to the permanent change in consumer behaviours toward online transaction through mobile application. At the same time, the competition in financial sector will intensify with the emergence of platform economy that can be attributed to the rising non-bank players who have potential to compete with financial institutions. These new players have advantage in utilising the non-financial data from their platform to understand their customers deeply and can extend their business to provide financial service through both current bank’s customer and or unbanked group. Thus, within 2020, we will see the significant changes in the consumer banking finance landscape as banks will try move to platform business model using intensive technology and innovation to understand and to provide financial service to their customers in order to retain their customer base.
The change in consumer banking landscape in Thailand will be significantly driven by the continuous disruptive technology which is the global phenomena.
TDB: Since MUFG replaced GE as a strategic shareholder in 2013 and the outsourcing of the bank’s infrastructure to IBM in 2012 – what are the key digital achievements Krungsri boasts today?
TP: Krungsri has laid out our second Medium-Term Business Plan 2018-2020. We have identified key strategic themes as follows:
- Leading by innovation, Think Digital First
- Enhance customer experience to become a main bank, and,
- Enhance retail and commercial banking platform to achieve sustainable growth
Krungsri laid out Digital Transformation Strategy through 7 Pillars which aim to improve customer experience and productivity & efficiency. In terms of digital advancement, in addition to our digital & innovation 7 pillars, we established Krungsri Finnovate, a venture capital to oversee investment in start-ups and FinTech operators. In 2018, Krungsri Finnovate have invested in Baania and SBI AI & Blockchain Fund. Krungsri Group is involved in 40 collaboration projects and connected with more than 150 startups.
The collaboration will not only enhance our digital capabilities, but also strengthen Krungsri Startup Ecosystem in various areas. To enhance our startups and Fintech experiments, Krungsri RISE, the first and only FinTech corporate accelerator in Thailand, has continued its success in supporting FinTech startups. The latest Krungsri Rise batch 3 successfully selected fast-growing startups specialising in financial technologies from Thailand and ASEAN.
We were successful in making Krungsri Mobile Application (KMA) our core digital banking platform. The application serves as a key driver in pursuit of our main strategies of customer acquisition, service provision, and becoming a mobile marketing platform. With increased security and new user-friendly features, the number of transactions via the app doubled from 500 million in 2017 to 1 billion in 2018, while the transaction volume of mobile banking increased 100% over-year.
Krungsri was successful in offering the near real-time cross border funds transfer based on the Blockchain Interledger, the first-of-its-kind for the business sector. The transactions through Krungsri Blockchain Interledger to transfer payment were successfully completed within 23 seconds versus 3 business days under the traditional systems. For the first Use Case, Krungsri has implemented to support remittance service between Laos and Thailand facilitating petrochemical trading transactions between IRPC and their big trading partners in Laos. The benefits from new technologies implementation can help customers to reduce pain points in terms of speed and costs. Krungsri expands new payment corridor in Singapore with Mitsubishi Corporation to support their liquidity management in less than a minute. Krungsri has planned to expand more payment corridors in Asian.
Krungsri was successful in offering the near real-time cross border funds transfer based on the Blockchain Interledger, the first-of-its-kind for the business sector.
TDB: Earlier in the year Krungsri unveiled plans to upgrade digital platforms for CX enhancement – can you comment on which specific processes are being transformed and how you intend to measure impact on Customer Experience?
TP: Since 2015, we have begun our transformation journey to move Krungsri from a “Product-Centric Bank” to “Customer-Centric Bank”, which will be a key enabler for us to build and maintain long term relationships with our customers. In becoming a customer centric organisation, various initiatives were carried out, which included customer segmentation, KPI alignment, and the introduction of new branch model. Importantly, we have been actively promoting and instilling a customer-centric culture within our organisation. For the next three years, we will continue on with the customer-centricity journey, with the four focus on the following executions:
- Firstly, Think Customer Journey: Of which we will identify key customer journey and mapping for High Net Worth, Mass, and Commercial Customers. Then innovative work processes and user experience capabilities building will be designed according to each customer journey.
- Second, we will Strengthen Customer Experience Governance of which standard operating model and collaboration framework between customer experience team and all stakeholders are defined. The target is to ensure that customer experience for Krungsri bank wide customers is unified with an on-going customer experience improvement objective.
- Third, the Omni-channel Platform, that will equip with a bank wide Customer Relationship Management platform across all customer touchpoints, whether it is sale management, service model, and customer feedback management.
- Lastly, we are also planning to Cultivate from the embedded Customer-Centric Culture from all levels of employee, and having a top management to lead by example
- Ultimately, Krungsri will be an organisation which think and act customer, and able to deliver superb customer experience to all segments.
Lastly, on the third strategic thrust under the new MTBP, we plan to enhance both retail and commercial banking platform to improve both efficiency and productivity. In addition, as mentioned earlier, the overriding objective is to deliver superb customer experience.
- Key initiatives under this strategic thrust include the structural realignment, process improvement, staff capability enhancement as well as product innovations.
- In addition, we are developing the future banking platform which also includes a digital branch model. On this note, we are exploring the right approaches to adopt and integrate digitalisation and FinTech to either strengthen our competitive capabilities or build new platforms for the next generation of banking services.
- For example, while the organisation adopts Robotic Process Automation (RPA), and agile way of working, our HR Development Initiatives will also include supports to help employees to embrace and make use of new technology to change the way they work.
We strongly believe that, when equipped with fundamental knowledge, people can utilise technologies to enlarge, to enrich their jobs as well as broaden their career choices.