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FinTechs belonging to this category provide identification services, which are required for most banking services.
Introduction
Attitude of the country towards identification services
Thailand is now in the process of developing laws and regulations on customer identification in relation to the Electronic Transaction Act. One of these developments is the National Digital ID (NDID) platform for authenticating identity authentication. Also known as e-KYC, it allows the customer to conduct transactions 100% online, such as bank account opening, digital lending, and so on. It also allows entities to rely on customer information collected by a third party to conduct the customer identification.
Legal affairs
Obligations and requirements to provide identification services
Currently, provision of identification services is not yet regulated in Thailand. However, as described above, the government is developing a draft royal decree to govern licensed digital authentication and authentication systems. Once the draft royal decree is enacted, the provision of digital identity platforms will be subject to a licensing/registration process, among other requirements.
Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area
Both BOT and the Electronic Transactions Development Agency (ETDA) recognise that identification services are important for the execution of various financial transactions, so they are now focusing on developing relevant regulations, as described above.
Economic conditions
Market size for identification services and biggest companies in this business area
With the absence of enforceable regulations for the provision of identification services, several commercial banks have been using the identification services provided by the NDID platform to authenticate their customers. Commercial banks utilising the NDID include Kasikornbank, Siam Commercial Bank, Bangkok Bank, Bank of Ayudhya, Kiatnakin Phatra Bank, CIMB Thai Bank, Government Housing Bank, and TMBThanachart Bank. Most financial institutions also use the same service provider to facilitate the identification process. Hence, the identification service business market in Thailand is quite small.
Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area
Authentication and identification service business should monitor the progress of the draft royal decree and any further regulations regarding identification services, as the need for these services is strong and growing, and changes in the regulatory environment could reshape the market for these services.