CIMB Thai Bank has invested Bt50 million to Bt60 million on developing its mobile banking system called Beat Savings to link with mPay, a mobile financial service from Advanced Info Service (AIS).
Investing in mobile banking represents value for money when compared with establishing a physical bank branch. It costs about Bt10 million to set up a branch and another Bt4 million per year to operate it, taking at least three years to reach break-even point, said Adisorn Sermchaiwong, senior executive vice president of CIMBT.
The bank has only 140 branches nationwide, far fewer than the 1,000 or so operated by large banks. Though the major institutions provide mobile banking as well, CIMBT notes that their clients still prefer to make their bill payments at the physical branches. CIMBT believes it can acquire mass-market clients if it offers them attractive solutions.
CIMBT believes its physical branches should facilitate wealthy clients who are interested in maximising returns, while mobile banking handles regular transactions.
To encourage mass-market clients to use mobile banking, CIMBT will offer more attractive interest rates than its competitors. However, Adisorn said the big draw for the mass market would be the convenience of mobile banking, not interest rates. And AIS’s mPay app offers such convenience.
Under a two-year exclusive agreement with AIS, that company’s customers can open electronic savings accounts at AIS shops and Telewiz and mPay stations, which will provide CIMBT automated teller machines. Only cash withdrawals can be made through these ATMs, he said.
AIS has a customer base of 44.3 million accounts, and CIMBT hopes for 100,000 accounts in the first year of this collaboration. If the average Beat Savings customer deposits Bt10,000-Bt20,000, the annual total will be between Bt100 million and Bt200 million. Beat Savings will be expanded to Big C Supercenter and Family Mart soon.
Adisorn said the bank was developing other financial products such as insurance policies and personal loans via mPay, which will be a channel for accepting loan applications.
“We expect to offer simple insurance such as personal accident and travel policies via mPay in the third quarter of this year. Loan applications should be added to the service by next year, as this must be approved first by the Bank of Thailand,” he said.
Adisorn said the bank hoped to have 800,000 Beat Savings customers within three years.