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As part of its ‘Think Digital First’ concept, Thailand-based Krungsri Bank is delivering a wide range of digital innovations. Efma's Anne-Laure Jozan's spoke to head of Retail & Consumer Banking, Dan Harsono.
Can you tell us about Krungsri’s ‘Think Digital First’ concept and some examples of your recent digital innovations, such as the facial recognition used for e-KYC (electronic know-your-customer) compliance in deposit account opening?
The award-winning Krunsgri Bank has committed to a ‘Think Digital First’ approach as one of its key strategies under its Medium-Term Business Plan. This sets out Krungsri’s commitment to focus on the adoption of smart technologies to digitize its business and operations. Krungsri is making good progress on driving the organization based on technology to introduce financial innovations to the banking sector.
A recent example of this strategic orientation is the Bank’s use of facial recognition technology, which enhances the accuracy of identity verification. Krungsri is the first bank in Thailand to deploy facial recognition for e-KYC to verify customer identity when opening deposit accounts. The technology helps reduce the risk of the proofing process and prevents identity theft and fraud. The facial recognition for e-KYC will be deployed for e-saving account opening, enabling customers to open e-saving accounts anywhere, anytime via Krungsri Mobile Application (KMA).
Another area of focus is a new platform providing cross-border Thai QR code payments, the result of Krungsri’s partnership with MUFG Bank in Japan. The platform has already been introduced at leading shopping centers in Japan with an initial roll-out in Ueno, Tokyo. Thai travelers can use the Krungsri mobile app, which works with participating banks to make payments. The service will also be available at other shopping malls in Japan in the next phase.
Krungsri Group collected six awards at The Asian Banker Thailand Awards 2019. What are the most successful aspects of Krungsri’s retail financial innovation that have led to these accolades?
Krungsri Group’s leadership in retail financial innovation was recognized this year when it won six awards at The Asian Banker Thailand Awards 2019. The recognition reflects Krungsri Group’s achievements in using digitization to speed up work processes and developing innovative products and services to strengthen its leadership in retail financial innovation. Krungsri Group has adopted an agile development approach to implement robotic process automation across business lines, as part of a plan to enhance its digital capabilities to deliver a great customer experience.
The awards include Best Branch Digitization, Application or Programme for the bank’s branch operation enhancement, and Best Digital Sales Initiative Application or Programme for the bank’s Analytics Based Decision Platform. They reflect Krungsri’s success in revamping customer relationship management at its branches, with integrated data and behavior analytics for improved sales management process. We aim to integrate customer information and improve the sales management process with our Smart Experience project, using technology platform to simplify branch customer experience.
Four of the awards went to Krungsri Group companies, Krungsri Auto and Krungsri Consumer. Krungsri Auto received Best API Initiative, Application or Programme for its Loan API at Sight project, while Krungsri Consumer received three awards: Best Process Automation Initiative, Application or Programme for productivity enhancement through robotic process automation (RPA), Consumer Finance Product of the Year for Krungsri First Choice, and Retail Payment Product of the Year for Central The 1 Card.
How does Krungsri plan to build on this impressive record of innovative developments and what technologies are you investing in now?
One way in which Krungsri plans to move forward is by expanding the use of its Krungsri Mobile App (KMA). KMA is Krungsri’s main digital platform and serves as a key driver for three core strategies: acquisition, services and marketing platform. The key feature for the acquisition strategy is the digital opening of savings account, fund account, and securities investment account via KMA platform. With the digital ID verification and e-KYC technology, customers can apply for personal loans and credit cards, as well as check their application status on KMA.
Facial recognition technology is a crucial part of the bank’s strategy. We have already deployed facial recognition for e-KYC to verify customer identity when opening deposit accounts at Krungsri’s branches nationwide. The facial recognition for e-KYC will be deployed for e-savings account opening on KMA. Customers will be able to open an e-saving account anywhere, anytime. They just take a photo of their national ID card or passport and a selfie, with no need of a physical branch visit to sign any document. We also aim to launch PA, travel and health insurance policy purchases on KMA, while auto loans and home loan applications on KMA are in the pipeline.
The bank’s services are designed to be customer-friendly. Customers can seek investment advice from Smart Advisor function, which calculates expected returns through the use of an algorithm based on customers’ risk profiles. With its open architecture, KMA supports transaction display and execution conducted by other asset management companies, which are partners of Krungsri.
As a marketing platform, we launched Krungsri Gift on KMA to offer privileges to customers. KMA will be the main channel for introducing a loyalty campaign. Krungsri e-Marketplace, launched on KMA in October 2019, will enable KMA users to enjoy special offers and discounts when they shop and pay for products and services on the KMA platform.
It’s a blend of data science, machine learning for data analysis and other technologies, such as APIs, AI and big data. Going forward, we continue to adopt new technologies, biometric authentication and Blockchain, to make KMA the best mobile application in Thailand.
Krungsri already has a strategic alliance with Security Bank. Do you have other plans to expand in the region?
Partnerships are a crucial part of the mix, not least of all Krungsri’s strategic alliance with Security Bank in the Philippines. The Philippines’ consumer finance market is one of the fast-growing markets in ASEAN (the Association of Southeast Asian Nations), providing a strong growth potential. The purpose of the alliance is to grow business outside Thailand, increase competitive advantage and expand the customer base to cover countries in the region beyond CMLV (Cambodia, Laos, Myanmar and Vietnam).
Initially, we aim to leverage synergy between Krungsri’s strong expertise in consumer finance and Security Bank’s strong brand presence and industry know-how to enhance the customer experience. We aim to roll out more initiatives with the focus on a customer-centric strategy to reach the mass market. In the long term, we plan to jointly explore opportunities to expand in other areas such as personal loans, motorcycle loans and insurance.
In 2019, Krungsri was named on the ESG100 list for the fourth year. What activities are you involved in to enable the bank to excel in sustainable development?
Krungsri puts tremendous effort into sustainable banking in all areas because sustainability practices will provide long-term benefits not only to the organization, but also to clients, and society as a whole. Sustainable development has become an important agenda for Krungsri. As a key financial intermediary, Krungsri is strongly committed, not only to providing environment-friendly financial services, but also to providing services with social responsibility, promoting good governance, ethics and integrity for a sustainable society.
In 2018, Krungsri established its Environmental, Social and Governance Division (ESG), while the board of directors also approved the declaration of the Environmental and Human Rights Disclosure Statements, underscoring Krungsri’s commitment to sustainable development. In 2019, we integrated ESG standards in our policies, business models and strategies, and credit underwriting standards and processes, as well as our internal operational processes. These include employees’ well-being and diversity.
Krungsri is also taking action to address global environmental issues such as climate change. We take steps to reduce greenhouse gas emissions across our business footprint and have a commitment to a 5 per cent reduction of greenhouse gas emissions by 2020. The bank runs campaigns targeting zero-waste living and minimizing single-use plastic.
Krungsri has stepped up efforts on responsible lending and product suitability, as well as financial inclusion, and financial literacy. The latest example is Krungsri’s issuance of up to US$220 million Women Entrepreneurs bond, the first private-sector ‘gender’ bond issuance in Asia Pacific. The offering is to support women-led small and medium-sized enterprises (WSMEs), which is part of a broader goal of financial inclusion for the underserved. The issuance strongly reflects Krungsri’s commitment to corporate citizenship practices and an ambition to meet the UN Sustainable Development Goals.
Along with other 14 banks, Krungsri recently signed a Memorandum of Understanding regarding Sustainable Banking Guidelines for responsible lending with the Bank of Thailand. The MOU focuses on four foundational elements of responsible lending practices, comprising leadership and responsible lending commitment; stakeholder engagement; internal implementation and transparency.
This interview is included in APAC Review 2019: Banks of the future