Thailand's central bank has called for more regulation of the country's growing fintech sector in order to prevent systemic risk and protect consumers.
"The businesses using fintech need to be regulated," said Bank of Thailand (BoT) governor Veerathai Santiprabhob. As a first step to building fintech-specific regulatory framework, the governor has called for fintechs to be registered with the central bank.
He also expects the Payment System Act to be implemented soon, pending final government approval. The Act will supervise electronic transactions and provide a system for businesses to verify clients' identities as well as a new payment standard, the Quick Response Code.
The central banks' proposals for the fintech sector are not all aimed at preventing risk though. P2P lenders will be allowed membership of the National Credit Bureau, allowing them to access consumers' credit data and investment rules governing the amount that financial institutions can invest in fintechs will be relaxed.
The central bank said that any new rules wil not be too stringent or impede innovation and will look to provide a 'sandbox' environment where fintechs can test their innovations in safety.
An indication of the growing adoption of digital banking services in Thailand was given by a request from the country's commercial banks to close some of their branches, the first year the central bank has received such a request.
"This reflects a change in how financial institutions have tried to reduce costs for service operations and technology will undoubtedly play a greater role," said the governor.
Meanwhile Thailand-based Siam Commercial Bank has launched a $50m fund for fintech investments through its newly-formed subsidiary Digital Ventures.
Nearly half of the fund will be invested directly in fintech startups, with $20m allocated for investment in venture capital funds and the remainder to be spent on its startup incubator DV Accelerate.