Ascend Bank, a virtual banking initiative by True Corporation, has postponed its planned launch, with CEO Sigve Brekke stating the service will now debut later this year. The delay is attributed to stringent regulatory requirements from the Bank of Thailand and a desire to ensure a competitive and well-developed offering before entering the market. Originally slated for a July debut, as indicated by Suphachai Chearavanont, senior vice-chairman of CP Group and True board chairman, the bank’s rollout is now anticipated within the current year.
Navigating Regulatory Landscape and Competitive Pressures
Sigve Brekke explained that the Bank of Thailand’s rigorous regulatory framework necessitates careful preparation. The group is committed to presenting a compelling concept and ensuring the right operational experience before officially launching Ascend Bank. This cautious approach comes as a competitor, Clicx Bank, launched its mobile application on June 19. Clicx Bank, a joint venture involving Krungthai Bank, Advanced Info Service, and PTT Oil and Retail Business, received its virtual bank license on May 14, becoming the first of three successful applicants to gain approval from the central bank.
Despite the delay, Suphachai Chearavanont has previously expressed confidence, downplaying concerns about falling behind rivals. He clarified that retail giant CP All does not intend to consolidate its subsidiaries, Counter Service Co, Thai Smart Card Co, and SET-listed CP Axtra (CPAXT), under ACM Holding, one of the entities that applied for a virtual bank license. This clarification is significant because the central bank’s regulations mandate that virtual bank license applicants consolidate their financial businesses under a single business group, distinct from non-financial operations.
Organizational Structure and Shareholder Approval
The consolidation of financial entities under a single holding company is a key requirement for virtual bank license applicants. CP All must adhere to these regulations, which include obtaining shareholder approval for such a move. In a significant development, CP All’s extraordinary general meeting of shareholders on May 29 voted against the principle of integrating Counter Service Company, Thai Smart Card Co, and CP Axtra into the financial business group of ACM Holding Company. A substantial majority, representing 96.4% of eligible voters, opposed the consolidation, as detailed in CP All’s filing to the Stock Exchange of Thailand.
Consequently, the launch of Ascend Bank is contingent upon the Bank of Thailand’s final assessment, particularly concerning the organizational structure of the CP Group. This situation highlights the complexities involved in meeting regulatory demands while structuring corporate entities for new financial ventures.
Broader Vision: Convergence and AI as Future Infrastructure
Beyond the specifics of Ascend Bank’s launch, Sigve Brekke elaborated on True Corporation’s evolving vision of convergence, distinguishing it from earlier concepts. He noted that convergence has shifted from simple service offerings like selling SIM cards or door-to-door sales to a more sophisticated integration of data centers, AI applications, customer data utilization, and digital finance. True Corporation is actively developing its capabilities in these areas, including a proprietary large language model built upon open-source frameworks.
Arise Ventures, a significant shareholder in True, is positioning Artificial Intelligence as the next critical infrastructure. Brekke anticipates a future where both the Thai population and government will prioritize data sovereignty, demanding that data be stored within Thailand and that applications are tailored to local culture rather than relying solely on foreign solutions. True Corporation sees a substantial growth opportunity in developing and offering localized AI tokens, which would be more affordable than global premium versions and specifically fine-tuned for the Thai language and cultural nuances.
Strategic Investments in AI and Digital Transformation
To realize this vision, True Corporation emphasizes the importance of controlling all three essential layers: data centers, AI applications, and customer data. The group already holds a leading position in Thailand’s data center market. Brekke highlighted the practical application of AI within the group, using it to gain deep insights into individual customer behavior, simulate personalities, and subsequently offer the most relevant products and services.
True’s AI strategy extends to its ‘AI for All’ initiative, which involves comprehensive AI training for all 10,000 employees. Furthermore, the company is collaborating with the Ministry of Higher Education, Science, Research and Innovation, and Google to equip 12 million students across Thailand with essential AI skills. This focus on upskilling the workforce and student population underscores a commitment to fostering a digitally adept society.
Brekke concluded by emphasizing a strategic shift in the company’s financial metrics, moving from measuring subscriber growth to focusing on net profit. The integration of AI is expected to be a key driver in achieving this, by enhancing revenue generation and reducing operating costs annually, thereby ensuring strong profitability for True Corporation.
Competitor Activity in the Virtual Banking Space
While Ascend Bank navigates its launch challenges, other players are making strides. Arak Sutivong, deputy chief executive of SCB X, confirmed that its virtual bank, Bank X, is progressing through compliance procedures and is also expected to commence operations later this year. This indicates a dynamic and evolving landscape for digital banking in Thailand, with multiple entities vying for market share and aiming to serve diverse customer needs through innovative digital platforms.
