Kasikornbank SWOT & PESTLE Analysis
COMPANY PROFILE -Kasikornbank
Business Sector :Banking
Operating Geography :Thailand, Asia
About Kasikornbank :
Kasikornbank is a public sector bank headquartered in Bangkok, Thailand. The bank, formerly known as Thai Farmers Bank, was established on 8th June 1945 with registered capital of Baht 5 Million. Kasikornbank is in terms of assets it is at 3rd position in Thailand with 15.5% of market share. Kasikorn has already established 882 branches at different locations in Thailand, it currently operates with 3 overseas branches in Phnom Penh, Hong Kong and Cayman Islands and has six representative offices in Tokyo, Yangon, Hanoi, Ho Chi Minh, Los Angeles and Jakarta and employees 20,352 people as on July 2019. Kasikorn Bank is listed in Stock Exchange of Thailand under name of KBank and KBank-F with authorized share capital of Baht 30.5 Billion and issued and paid up share capital of Baht 23.9 Billion, with market capitalization of Baht 442 Billion (#2 in Thai banking sector)Kasikornbank mission statement states that it “Aims to harmoniously combine technology and human resources to sustainably create world-class quality financial services, so as to achieve optimal benefits for all stakeholders.” Kasikornbank vision statement states that it “aims to be a most innovative, dynamic, and proactive customer-centric financial institution that creates sustainability for all stakeholders.”
Kasikornbank Revenue :
Net operating income
Million Baht - 155,483 – FY ending Dec 31, 2018
Million Baht - 156,856 – FY ending Dec 31, 2017
Competitive Analysis of Kasikornbank
| 1. Strong international regional branch network 2. Digital channels in banking for better customer experience 3. “Stable” credit ratings and outlook 4. Efficient human resource management | 1. Decrease in Coverage Ratio in the Last Year Increase in Non-Performing Loans |
| 1. Inclusion of Artificial Intelligence to Provide Better Service 2. Leveraging on Cryptocurrencies to Combat Competition 3. 3-Track expansion in foreign countries 4. Eastern Economic Corridor (EEC)- a key driver for this investment cycle | 1. Cyber Security Risk Increased due to higher IT usage in Banking 2. Increasing competition due to high number of players 3. Non-conventional competitors in financial space |
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Detailed SWOT Analysis of Kasikornbank
Strength
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Weakness
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Opportunity
1. Inclusion of Artificial Intelligence to Provide Better Service: Artificial Intelligence or Machine learning refers to next generation services to the customers. AI enables system to analyze recorded data from transaction history, queries, search history, social media etc. which is then used to customize product according to the requirement of the customers. The most important part of machine learning is to understand consumer behavior, understand reaction to different promotions, advertisement shown to them and hence enhancing the overall consumer experience. Apart from this AI also analyses historic data and perform risk analysis of customers and makes a pattern for fraud detection. Further AI can also be used for fraud detection and Anti money laundering as they are difficult to be identified in capital market but application of AI have solved this complexities to great extent. Hence KBank can adopt Machine Learning and AI to provide customers a better experience like never before.
2. Leveraging on Cryptocurrencies to Combat Competition: Four cryptocurrencies have been recently approved by the Thai Securities and Exchange Commission for base trading purpose although they are still not considered as legal tender within the country. Kbank can nevertheless use this opportunity to improve its Cryptocurrency investments in demat accounts. Such facilities will give an edge to KBank as compare to its competitors. However even though for now cryptocurrency is not legal tender but there is high possibility that it will be approved soon and hence KBank should work on maintaining its infrastructure for the same. And so, there is huge opportunity for Kbank and other major banks in Thailand to differentiate themselves from traditional banking practices.
3. 3-Track expansion in foreign countries: 3-Track expansion is one of the most ambitious plans of Kasikorn Bank with objective being ‘Regional digital expansion’ which started at the end of 2018 and will extend till 2021 onwards. This plan is divided into 3 tracks which includes getting full International Banking license for countries including China, Lao PDR, Cambodia, Indonesia, Myanmar and Vietnam in track 1 and expansion using conventional methods in China and other countries. Track 2 constitutes of transactional and digital banking expansion which will extend till end of 2020, this includes initiating tourist visa payments, acquiring businesses in Vietnam, Indonesia and other countries and starting Issuing business. Lastly, track 3 involves providing Industry solutions and development of Ecosystem whose main objective will be Mass customer acquisition and engagement, starting at the beginning of 2019 and completed by mid of 2020, it includes development of Regional Tourist Platforms and Industry Solutions and ultimately achieve Regional Digital Connectivity (Banking + Beyond Banking).
4. Eastern Economic Corridor (EEC)- a key driver for this investment cycle: The ECC project goals include transforming Thailand into Thailand 4.0 – an innovation-driven society. This is to be achieved by increasing investments in ten major industries. Also included within the project are plans to improve the existing transportation facilities and include large investments in the logistics system which will help to convert the the EEC area, covering 13K sqm of three eastern provinces, i.e. Chachoengsao, Chonburi, and Rayong, into a focal point for trade, investment, and tourism. KBank will have great opportunity for growth here as this is expected to cause a major growth within the banking sector.
Threat
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References used in Kasikornbank Analysis Report
1. Kasikornbank Company Profile - https://www.reuters.com/companies/KBANK.BK
2. Kasikornbank Annual Report 2018 - https://kasikornbank.com/en/IR/FinanInfoReports/financialReports/2018_AR_ENALL.pdf
3. Kasikornbank Annual Report 2017 - https://kasikornbank.com/en/IR/FinanInfoReports/financialReports/2017_AR_ENALL.pdf
4. For Savvy Thai Banks its Already Time to Prepare for Ageing Demographics - https://www.iflr.com/Article/3503128/For-savvy-Thai-banks-its-already-time-to-prepare-for-aging-demographics.html
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Kasikornbank SWOT and PESTLE analysis has been conducted by Divyanshu Bajpai and reviewed by senior analysts from Barakaat Consulting.
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