Krungsri preps B7-8bn for digital, innovation strategy

Mr Pairote, left, and Mr Akita say the bank is positioning itself regionally under its medium-term business plan.

Bank of Ayudhya, under the marketing name Krungsri, plans to spend a budget of 7-8 billion baht this year on digital and innovations to expand digital banking services both in Thailand and regional markets.

This is the second year of Krungsri’s medium-term business plan, which covers 2021-23.

The plan has three core strategies: Asean enhancement and expansion, ecosystems and partnerships, and digital and innovation, said president and chief executive Seiichiro Akita.

The bank plans to invest 7-8 billion baht this year on information technology to strengthen its digital and innovation ecosystems in several areas.

With digitalisation, the strong global network of the bank’s major shareholder, Mitsubishi UFJ Financial Group (MUFG), and the regional network of Krungsri should allow the bank to support customers expanding their business in Asean, he said.

The business plan calls for the bank to help customers grow beyond Thailand, developing its services beyond banking and adopting digital services, Mr Akita said.

Chief strategy officer Pairote Cheunkrut said this year Krungsri will focus on expanding Application Programming Interface with its partner banks in Asean, co-building an artificial intelligence (AI) tech lab with MUFG and partners such as Grab, constructing smart financial infrastructure, both domestic and cross-border, and enhancing blockchain and AI solutions.

In 2022, the bank plans to build value-added partnerships in various sectors, including energy, telecom, insurance, real estate, retail and e-commerce, said Mr Pairote.

Krungsri is also working with partners on digital assets and private markets to bring unique and attractive investment products to customers.

In terms of Asean connectivity, Krungsri is present in five regional markets that contribute 6% of the bank’s total net profit. The goal is to increase that proportion to 10% in two years, he said.

Krungsri’s footprint in Asean serves customers with over 500,000 accounts in Cambodia, Laos and the Philippines, offering financial support worth 64 billion baht.

In addition, Mr Pairote said the bank plans to expand cross-border service transactions from three countries in 2021 to eight countries in 2022.

More than 500,000 payment and remittance transactions accounting for more than US$200 billion are made through Krungsri across regional markets each year.

Krungsri set a total loan growth target for 2022 of 3-5% and aims for net interest income growth of 3.1-3.3%.

The bank expects flat growth for non-interest income and wants to control non-performing loans at no more than 2.6% this year.

Moreover, Krungsri has embarked on a mission with MUFG on a goal of net zero greenhouse gas (GHG) emissions for its own operations by 2030 and net zero GHG emissions across the finance portfolio by 2050, Mr Pairote said.