Kasikornbank SWOT & PESTLE Analysis

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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Political

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Economic

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Social

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Technological

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Legal

1. Revenue Code Amendment Act (2019): This law effective from March 2019, stipulates that all the financial Institutions are required to report individual to authorities if he does 3000 or more transactions within a year or 400 of more transactions with combined value of more than Baht 2 Million. Failing to do this Banks shall be fined with not more than Baht 100,000. A report of transactions of previous year has to be submitted to The Revenue Department-Directorate General and he has the authority to order violators to comply with the law within the established time frame provided. This significantly increases reporting requirements for Kasikorn bank and will result in additional costs.

2. Impact from banking fee waiver scheme: The commercial banking sector of Thailand has had its fee and noninterest income in 2H18F severely affected ever since the implementation of the electronic banking fee waiver scheme in March 2018. Operational costs have also gone up. Kasikornbank has been especially affected owing to its fee-based income model which has been hard hit by the cancellation of digital transaction fees. Also, as these moves are conducive to the transformation into a cashless society, it is likely that this will result in some operators gaining a competitive edge. Kasikorn Bank decided to waive off online transaction charges levied by bank, inspired by government’s objective of moving from cash rich society to cashless society which became one of the main causes of decrease in non-interest income by 17.46% in span of 1 year that is from 2018 to 2019. Big banks in Thailand are facing a lot of pressure from Non-Banking Companies as many customers are moving to alternate methods of money transfer which are of low cost and backed by government like PromptPay, Omise and digital wallets like True Money all these factors together lead KBank and others to decision that fees levied on online transactions should be waived off for now.

Environmental

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