BANK OF AYUDHYA or Krungsri plans to set up a new venture-capital subsidiary to oversee its investment in start-ups and financial-technology (fintech) operators.
Siam Commercial Bank and Kasikornbank have already launched venture-capital companies to invest in start-ups and fintech. Thakorn Piyapan, head of Krungsri’s consumer group, said it had acknowledged that it should separate fin-tech management from the bank’s core operations to enhance flexibility, noting that Krungsri had said earlier that it could handle venture capital internally.
The initial registered capital of the new subsidiary is set at Bt10 million, he said.
The bank will divide its venture-capital investment into three phases. The first stage is investment via domestic and foreign funds in order to become familiar with new fintech trends. The second and third stages will entail direct investment in fintech operators and start-ups that already have products the bank is interested in.
Investment decisions will comply with Krungsri Group’s own agenda, while the parent bank – Bank of Tokyo-Mitsubishi UFJ – will provide advice. BTMU has its own international venture-capital investments already, Thakorn said.
After setting up the subsidiary, Krungsri will transfer its digital-banking and innovation business to the new company, including 45 staff, in order to focus on developing fintech itself and under the Krungsri RISE Fintech Accelerator programme.
The bank will add 10 staff to oversee venture capital, and it has started talks with two or three potential partners.
Thakorn said innovation was essential for all organisations right now and machine learning would be key to technology worldwide.
Maximising the use of data will help the bank reduce operating costs in the future.
Krungsri is also looking at whether to enhance its network of branches. It now has 670 branches nationwide, fewer than other major banks, which have around 1,000 each. It might not need that many, but it must make sure its branches are able to handle any transaction its customers need to make, especially business customers.
By the end of this year, Krungsri will have 703 branches.