FINANCIAL technology (fintech) has taken the lead in Thailand’s digital transformation process, to be followed by e-commerce in the next five years, said Pete Chemsripong, general manager of ThoughtWorks (Thailand), a global tech-consulting firm.
“Knowledge of how new technology can re-model businesses is still limited to websites and applications,” he said.
In the past few years, we have seen the rise of financial technology and its adaptation by financial institutions and new companies, setting the first stage of a technological transformation in the country, Pete told The Nation.
But, when it comes to small and medium-sized enterprises (SMEs), there is little awareness of what digital technology has to offer in terms of improving daily operations, he said.
Pete predicts that after fintech, e-commerce would be the next technological trend, before transformation in other segments such as agriculture and education. He, however, expects the Thai public sector to lag behind in undergoing a holistic digital transformation.
With fintech leading the charge in transforming the economy, key financial institutions have been funding tech startups to strengthen the ecosystem in Thailand.
Krungsri Finnovate, a corporate venture capital (CVC) arm of Krungsri, plans to invest up to US$50 million (Bt1.577 billion) in seven tech startups this year, focusing on artificial intelligence (AI) and big data analytics, according to Sam Tanskul, managing director of Krungsri Finnovate.
One of its investments, which has been finalised, saw Finnovate teaming up with a Singapore-based startup “Silot”. The company develops QR code-payment systems and is currently working on AI to help banks streamline their operations.
Silot has already developed a QR code-payment system for Krungsri Bank while Krungsri Finnovate has so far invested $2 million in the company.
Digital Ventures, the startup investment and development subsidiary of Siam Commercial Bank (SCB), plans to invest $55 million in “deep tech” startups over the next two years.
Meanwhile, Kasikorn Vision (KVision), an investment holding company of Kasikornbank, has set aside $245 million as seed money for startups in the Asean region.
“Digital technology is the competitive advantage,” Pete said, adding, “it blurs market competition”.
For example, he said, banks nowadays do not only compete with each other for daily transactions as e-commerce and social messaging companies can also develop their own digital payment systems in direct competition with financial institutions.
“To fully capitalise on the opportunities arising from the digital disruption in the market, firms must see technology as a core issue,” he continued.
“Instead of assessing the performance of the company by departments, with the issue of technology falling only to the IT department, firms should instead assess their performance holistically, especially when it comes to technology.”
Furthermore, the rise of digital technology also allows SMEs to compete with big corporates.
“The number of franchises or branches do not matter that much these days as firms can now get in touch with their customers online and learn more about their behaviours through data analytics,” Pete said.
However, the key challenge for SMEs in the process of technological transformation is the lack of awareness and know-how in implementing changes, he contended.
Nevertheless, with the digital transformation underway, many businesses have followed the trend with a number of logistics and agricultural firms starting to use machine learning to improve their operations.
Amid growing demand from corporate clients for new technology, ThoughtWorks is striving to meet their needs.
The company will increase the number of tech consultants based in Thailand, currently 40, by 30 per cent this year.
The consulting company will also hire foreign talent to further strengthen its workforce and services, offering efficient and holistic advice to companies seeking new technology for better performance.