Bangkok – 19 December 2024 – The Lightnet-WeLab consortium, an applicant for virtual banking license in Thailand, has announced its vision to empower the underserved segment to actively participate in and thrive within the digital economy. Dr. Chalee Asavathiratham, President of the Lightnet Group, steps into the role of Senior Advisor to the consortium, extending his expertise in Thailand’s virtual banking landscape. His leadership elevates the consortium's proven track record of building and operating virtual banks across Asia, focusing on digital lending and credit risk management.
Virtual banks: Transforming global financial landscape in the last 5 years
Virtual banks are reshaping the global banking landscape, setting new standards in services and growth that far surpass traditional benchmarks. The consortium is confident that the proliferation of virtual banks will inject greater financial innovation and inclusivity in Thailand.
- Indonesia, one of Thailand’s closest neighbors, has witnessed the growing population of virtual banks alongside improved access to credit for underserved individuals. With over 70 million accounts opened across 15 virtual banks, these new entrants have surpassed the rest of industry in loan disbursement, showing a 22% increase in loans.
- In Hong Kong, the 8 virtual banks licensed in 2019 have shown remarkable growth in a well-banked market, with 30% of the population has opened accounts fully online. Over the past three years, total depositors and loan disbursements have seen impressive CAGRs of 77% and 147%, respectively. The SME sector is also benefiting significantly, with increased efficiency being the key driver for adopting virtual banking solutions.
- Some virtual banks even achieve massive scale and influence. A standout example is the world’s largest virtual bank NuBank in Brazil—valued at an astounding USD 70 Billion (approximately THB 2.4 trillion) — surpassing the combined market capitalization of Thailand's top four banks.
- With the success of launching two virtual banks at scale in Indonesia and Hong Kong, the consortium is in a strong position to leverage the global success and adapt it to cater to Thailand’s local needs.
Achieving financial inclusion with advanced technology and fit-for-purpose product
Virtual banks can enhance financial inclusion in Thailand, particularly for the informal economy, which accounts for nearly half of the GDP and encompasses 52.7% of the labor force. This segment faces substantial hurdles, with informal debt estimated at THB16.3 trillion.
To effectively address these issues, the consortium emphasizes the importance of effectively identifying the underserved —such as individuals with irregular incomes or limited financial record and those who lives far away from bank branch. With a clear understanding, the consortium can adopt a targeted approach to systematically achieve financial inclusion across Thailand, mainly in the following 3 key directions:
Financial inclusion – re-setting new market benchmarks: Access to financial services is crucial in bridging the gap for underserved segments. In Thailand, for instance, minimum account opening balance of THB 500 at traditional banks can hinder financial inclusion. The emergence of virtual banks has the potential to foster greater competition for the benefit of consumers. This is evidenced by the consortium’s experience in Hong Kong: when virtual bank licenses were announced in 2019, incumbent banks immediately eliminated their low-balance fees to align with the market’s ‘new-normal’. Leveraging the consortium's extensive ecosystem, with 46 million individuals across diverse sectors like agriculture, F&B, and e-commerce, and over 150,000 physical touchpoints, the consortium is well-positioned to close access gap for the informal economy, shaping a more inclusive financial landscape in Thailand.
Innovative products: The consortium aims to break away from the traditional one-size-fits-all banking approach by tailoring financial products for underserved segments. For example, Bank Saqu, WeLab’s virtual bank in Indonesia, introduced customizable "saving pockets" within a single account, empowering users to effectively manage income and expenses across various life aspects. This innovative feature has achieved a 60% monthly active rate, attracting nearly 2 million customers within 12 months, with 40% being informal workers. These outcomes underscore the efficacy of tailored products in addressing the unique needs of underserved groups, highlighting the potential for a similar localized product strategy in Thailand to further promote financial inclusion.
Leading with responsible credit: Responsible lending is key in transitioning informal segment into the formal economy. WeLab, has disbursed over USD 15 Billion (approximately THB 512 billion) in loans across Asia in the past 12 years, harnesses its proprietary credit technology for this transformation. Through tailored risk-based pricing based on individual credit and behavioral profiles in the credit underwriting process, it achieved a better-than-market delinquency rate, e.g. outperforming Hong Kong’s banking industry credit performance by 6 times in the past year. The consortium is committed to localizing WeLab’s proven AI-driven credit technology and risk-based pricing model to suit Thailand. By utilizing multi-dimensional data and advanced edge computing technology for credit assessment, it can extend credit to borrowers who might be deemed too risky under the traditional credit assessment. For example, alternative data satellite image analysis from drones can help banks identify high-productivity agricultural borrowers with strong credit profiles, enhancing the effectiveness of risk-based pricing.
Appointment of Dr. Chalee Asavathiratham as Senior Advisor of the Lightnet-WeLab Consortium
The consortium is also pleased to appoint Dr. Chalee Asavathiratham, a seasoned veteran in the banking industry, as its Senior Advisor. Prior to joining Lightnet Group, he was the Chief Digital Banking Officer at Siam Commercial Bank in Thailand, where he oversaw big data and AI solutions development that advanced the bank’s digital banking capabilities. Drawing on his 25+ years of finance and technological experience, Dr. Chalee is poised to lead the consortium in securing the virtual banking license, with an aim to revolutionize banking services and promote financial inclusion through innovative solutions for Thailand.
Dr. Chalee, President of the Lightnet Group and Senior Advisor of the Lightnet-WeLab consortium, said, “My dream is to see that every Thai person liberated from the debt cycle problem, and eventually achieve financial freedom and stability. Banking has the power to do so, particularly for virtual banks that harness technology. With our proven experience in building virtual banks in Asia, if we have the honor of getting the license, we are confident to deliver readily available products, AI-powered solutions and exceptional customer experiences within 12 months to narrow the financial gap for underserved retail and MSME segments in Thailand. I look forward to leading the consortium and collaborating closely with the Bank of Thailand to help shape a brighter financial future for the country.”
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About Lightnet
Lightnet Group, a global fintech leader from Thailand, is committed to advancing technology that enhances accessibility and efficiency, aiming to establish Thailand as a future hub for financial innovation. Licensed by the Bank of Thailand and four other central banks in Asia and Europe, Lightnet Group processes over USD 10 billion annually and offers a wide range of payment solutions in over 150 countries. The company is backed by notable strategic investors, including UOB Venture Management, Seven Bank, Hanwha Investment & Securities, Uni-President, Raffles Family Office.
Lightnet combines local expertise with global experience. Lightnet is founded by Mr. Chatchaval Jiaravanon, known for his roles in AEON Thana Sinsap and Finansia Syrus, brings over 30 years of experience in the financial sector, including international ventures like acquiring Fortune Magazine.
Through its ecosystem partners in various industries, Lightnet has the touchpoints to reach 46 million local customers across both urban and rural areas in Thailand. Lightnet Group focuses on serving unserved and underserved retail and MSME sectors, through over 150,000 local service channels.
For more information, visit lightnet.io or follow us on LinkedIn.
About WeLab
WeLab, a leading pan-Asian fintech platform, operates two digital banks as well as multiple online financial services with leading positions in Hong Kong, Mainland China, and Indonesia, with nearly 70 million individual users and over 700 enterprise customers. WeLab uses game-changing technology to help customers access credit, save money, and enjoy their financial journey.
Powered by proprietary risk management technology, patented privacy computing techniques, and advanced AI capabilities, WeLab offers mobile-based consumer financing solutions and digital banking services to retail individuals and technology solutions to enterprise customers.
WeLab operates in three markets under several key brands, including WeLend, and WeLab Bank in Hong Kong, various business lines in Mainland China, Maucash and Bank Saqu by Bank Jasa Jakarta in Indonesia.
WeLab is backed by the most renowned investors including Allianz, China Construction Bank International, International Finance Corporation (a member of the World Bank Group), Malaysian sovereign wealth fund Khazanah Nasional Berhad, CK Hutchison’s TOM Group, and Sequoia Capital.
To learn more, please visit: www.welab.co, or follow WeLab on LinkedIn and Facebook.