Analysis of Competitive Landscape and Strategies of Competition in the Thai Mobile Banking Market

In Thailand, the increasing competition forces banks to seek strategic alliances (network collaboration) to offer innovative solutions in the payment market. It is argued that the progress of mobile banking along the innovation life cycle needs network linkages between banking and telecommunication industries. The analysis of competing for the future of mobile banking in Thailand based on the Managing Migration Paths Model (Hamel and Prahalad 1994), shown in Fig. 23.3.

The analysis of the competitive landscape in the Thai mobile banking is shown in Tables 23.1 and 23.2. They present a study focused on the leading banks: Bangkok Bank, Kasikorn Bank, Siam Commercial Bank, Krung Thai Bank and Bank of Ayudhya. These five banks had the highest growth performance in the Thai banking industry in 2014.

In clearing a path towards a future of mobile banking in Thailand, banks enter into strategic alliances to provide value-added services to their customers. Kasikorn Bank is the most aggressive in expanding its mobile banking market. By partnering with DTAC, Kasikorn Bank can develop ATM SIM for mobile payment transactions, using a secure platform for financial transactions. Kasikorn Bank also collaborates with Advanced Info Service Public Company Limited (AIS), Samart i-Mobile, HTC Corporation (HTC) and Telephone Organization of Thailand (TOT) to offer K-Mobile Banking Plus. The use of collaborative strategy according to Hamel and Prahalad’s

Managing migration paths model and the future of mobile banking competition in Thailand (Source

Fig. 23.3 Managing migration paths model and the future of mobile banking competition in Thailand (Source: author's design)

Table 23.1 Summary the competitive landscape in the Thai mobile banking, 2014

Bank

Bangkok Bank

Kasikorn Bank

Siam

Commercial

Bank

Krung Thai Bank

Bank of Ayudhya

Year of establishment

1944

1945

1907

1966

1945

Mobile banking services

BBL Mobile iBanking

K-Mobile Banking Plus, K-Mobile Banking SMS, K-Mobile Banking ATM SIM

SCB Mobile Banking

KTB Online@Mobile

Krungsri Mobile Banking

Network

collaboration

(Managing

Migration

Model)

Business partner with AIS,

DTAC, True, Hutch and international partner of Brookfield to support Bangkok Bank's mobile banking capabilities

Business partner with DTAC to develop ATM SIM for mobile banking services

Business partner with AIS to provide EDGE/ GPRS services

Business partner with Samart i-Mobile, TOT, HTC and Microsoft to provide 3G ready services and extend service channels for the bank customers

Business partner with AIS to provide mobile Internet services Business partner with DTAC for Happy DTAC to provide SCB Easy M-? ау services

Business partner with AIS, DTAC and Truemove as well as Cisco to provide audio, video and web conferencing capabilities

Business partner with AIS, DTAC and True Move network providers to provide GPRS/EDGE/3G mobile banking services

Source: Author's own design based on the Thailand Commercial Banking Report

Table 23.2 SWOT analysis of the competitive landscape in the Thai mobile banking, 2014

Bank

Bangkok Bank

Kasikorn Bank

Siam Commercial Bank

Krung Thai Bank

Bank of Ayudhya

Strengths (S)

Strong corporate and retail customer base across Asia One of the region's strongest brand names

Largest commercial bank in Thailand and one of the largest regional banks in Southeast Asia

First bank to launch mobile banking services and thus build customers' confidence and credibility Strong corporate and retail customer base and strong brand in Thailand

Extensive branch network

Links to Thailand's powerful royal family

WAP services can be used in all operating system platforms

Government- backed, state enterprise bank Thailand's largest retail bank

Strong brand and wide branch network

Weaknesses (W)

Slowing loans and deposits growth as the economic climate worsened

К-Mobile Banking ATM SIM could not serve all customer groups

Late entry in the mobile banking market

No international presence and dependence only on the Thai market

Relatively high NPL exposure

Opportunities (0)

Well placed for expansion into China, where the bank has cultural and historic ties

The first to market and so could build trust and credibility in the mobile banking system.

Aggressive collaboration with mobile phone providers supports strong profit growth

The bank's main revenue is from mutual fund selling and so increases customer convenience via mobile use

Rapidly expanding branch network

New focus on profitability

Threats (T)

Growing competition in domestic market and from overseas (particularly from non-bank financial institutions)

Political uncertainty in Thailand

Growing competition in domestic market and from overseas (particularly from non-bank financial institutions) Political uncertainty in Thailand

Growing competition in domestic market and from overseas (particularly from non-bank financial institutions) Political uncertainty in Thailand

Growing competition in domestic market and from overseas (particularly from non-bank financial institutions) Political uncertainty in Thailand

Growing competition in domestic market and from overseas (particularly from

non-bank financial institutions) Political uncertainty in Thailand

Source: Author's own design based on the Thailand Commercial Banking Report

Managing Migration Paths model has helped turn Kasikorn Bank to be the leader of digital banking in Thailand with the highest account numbers of 7 million or 38 % of the total market share in 2014.

The use of strategic alliances underlying the competitive banking landscape aims at upgrading the core banking system and expanding the e-banking channels. This is evident in the case of Bangkok Bank’s collaboration with Brookfield, Fiserv’s Mobile Money service, to support its mobile banking capabilities; strategic alliances of Siam Commercial Bank, Krung Thai Bank and Bank of Ayudhya with AIS, DTAC and True Move to build a secure banking platform and enable short messaging service (SMS), wireless application protocol (WAP) and downloadable mobile applications.

 
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