Study says banks set to increase footprint
Financial Insights Asia/Pacific, a financial services and consulting company, has projected that the number of bank branches will grow about 10 per cent due to the continuing upsurge in the number of investment channels.
The company recently completed its "Thailand Bank Channel Effectiveness Study", a nationwide project on the country's bank investments avenues. "Haphazard size-building will lead to diminished, rather than increased, strength. Managing growth is proving to be more important than growth," said Michael Araneta, senior manager for Financial Insights Asia/Pacific IT Benchmarking Practice. Araneta said the country's largest banks are expected to fiercely protect their dominance in distribution, amid significant increases by former finance companies that have recently been granted banking licences under the financial sector master plan. Most prominent among them is TISCO Bank, which announced a few months ago that it would increase its branches from 14 to 30 and hire a significant number of new employees. Among the big banks, the company has singled out Siam Commercial Bank, which has grown by an astounding 70 branches in a span of about nine months. The "footprint", which refers to the area in square feet, of Thai banks' branches is shrinking because retail banks are opening branches at supermarkets and shopping centres, which are typically limited in terms of space. The massive growth in ATMs in the past few years is also expected to be sustained up to 2008 and could be resulting in fewer transactions per ATM. This is forcing Thai banks to seek ways to increase usage or introduce more value-added transactions at ATMs. Thai banks are preparing to make investments to integrate information across all of their channels, allowing them to offer the same capabilities or the same level of customer service regardless of how a customer chooses to transact with the bank. The study describes the levels of investments being made by the country's banks on their channels from branches, to ATMs, Internet banking and call centres. The study also reveals how some Thai banks are becoming more adept at channel management, specifically in opening new branches and in recouping investments in these branches. The company will unveil the findings of the study at the "FinTech Asia 2006" on Thursday and Friday at the InterContinental Hotel in Bangkok.
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