Digital Financial Technology System: The Major Change Maker of Thailand's Future Economy

Understanding Fintech in the Current Era

Recently, the term Fintech has been mentioned almost every day, whether in the business sector, media, or even in everyday conversations among the general public. But what exactly is Fintech? Why has it become a topic that everyone needs to pay attention to?

Fintech, which is short for Financial Technology, is the integration of the financial world with digital technology to create new ways of conducting financial transactions that are easier, more convenient, and more accessible through the internet and applications. Whether it’s depositing and withdrawing money, cross-border transfers, investing, or currency exchange, Fintech also saves time and reduces fees.

A clear example is that we no longer need to go to the bank; simply scanning a QR code allows instant money transfer to the recipient, or using Mobile Banking to pay for various services without cash. Fintech systems didn’t emerge overnight but have been developing gradually—from the era of ATMs and Credit Cards to the present day with mobile payment solutions.

How Many Types of Fintech Are There?

Today, Fintech has evolved into many forms depending on its purpose. It can be classified into 7 main categories:

1. Banking Technology - Technologies that improve banking services, allowing users to perform financial transactions easily via mobile phones without visiting the bank or filling out complicated paperwork. In Thailand, QR Code payments and Mobile Banking are used for purchasing goods and cross-bank transfers without fees, saving both money and time.

2. Crowdfunding - A system of raising funds from the general public through intermediary platforms. Investors can receive returns in the form of dividends or interest. This system helps SMEs and startups access funding sources without relying solely on banks.

3. Cryptocurrency - Digital currencies created to directly address issues in the banking system, utilizing blockchain technology that bypasses banks or intermediaries. Today, cryptocurrencies are well-received because they enable real transactions, investments, and profits.

4. Payment Technology - Payment systems using technology, allowing payments for goods or services without cash, such as QR code payments or e-wallets like True Money Wallet. Unlike Banking Technology, e-wallets are not owned by banks but are platforms.

5. Enterprise Financial Software - Digital accounting systems designed to help entrepreneurs manage their accounts more easily, including issuing tax invoices, quotations, or payroll systems. Flow Account is an example of a popular accounting program in Thailand.

6. Investment Management - Investment management applications that allow investors to buy and sell various assets easily, such as Bitkub for cryptocurrency trading or applications for stock markets.

7. Insurance Technology - Digital insurance purchasing systems where users can buy insurance online without complicated paperwork. The system calculates premiums and analyzes risks in detail.

Pros and Cons of Fintech in Daily Life

In Thailand, Fintech usage covers all 7 categories mentioned above, from using bank cards for payments to the current trend of digital payments over cash. This financial innovation is like a double-edged sword, with both advantages and disadvantages.

Advantages: Fintech reduces costs and fees, saves resources and time, makes work easier, provides easier access to capital markets for investors, and offers opportunities for SMEs and startups to grow rapidly—whether through stock markets, mutual funds, cryptocurrencies, or international markets—all accessible instantly via the internet.

Disadvantages: The stability of the financial market is at risk because these systems make borrowing easier for everyone, which could impact the economy, such as increasing inflation. There are also security risks related to personal data, including potential hacking of accounts.

Who Is Fintech Suitable For?

Fintech is not designed for any specific group but is suitable for everyone and all professions.

General Public: Can access services directly without intermediaries, such as paying for goods, transferring money, investing in stock markets, or applying for loans.

Banks and Financial Institutions: While Fintech might seem like a threat to banks, it actually helps improve banking operations, reduce costs, reach customers more easily via Mobile Banking, and facilitate transaction data collection.

E-Commerce Providers: Benefit from accepting payments through multiple channels, including Mobile Banking and e-wallets like True Money Wallet, making it easier for merchants to check balances via mobile phones.

Investors: Can now open investment accounts and choose various investment products themselves, including stock markets, mutual funds, cryptocurrencies, or international markets. Crowdfunding also offers new opportunities for investment.

Businesses of All Sizes: Benefit from online accounting programs that simplify account management, including issuing tax invoices, quotations, or payroll systems, without wasting paper.

The Importance of Fintech for Thai Life Today

Both the government and private sectors in Thailand are placing great importance on Fintech. The government has developed platforms like the G-wallet app to stimulate the economy and encourage spending. Private companies are adopting Fintech in various business operations, demonstrating that financial technology plays a vital role in the daily lives of Thai people today.

Successful Thai Fintech Startups

With the increasing role of Fintech, several startups have achieved success, including:

Bitkub: Recognized by most Thais, it falls under Investment Management and Cryptocurrency categories. It is a platform for buying and selling Bitcoin, Ethereum, and other digital coins. The business has grown rapidly over the past few years, becoming Thailand’s leading cryptocurrency exchange.

Finnomena: An Investment Management platform for investing in stock markets and mutual funds. It also helps users plan their finances and assess risks for future investments.

Flow Account: An online enterprise financial software praised by entrepreneurs for easy account management, even without accounting expertise.

These businesses generate substantial returns for entrepreneurs, and the financial industry continues to drive the country’s economy. In the future, Fintech may expand into other areas as the times change.

Opportunities and Challenges of Fintech in Thailand’s Future

If asked about the future of Fintech in Thailand, rapid growth might be unlikely due to several limitations:

Legal Barriers: Thai law currently does not issue visas for foreign investors. Building Fintech businesses requires assistance from experts and foreign capital.

Investment Barriers: Although Thai Fintech startups have succeeded, the country still faces funding issues. Fintech businesses are high-risk in the early stages and require large capital reserves, but Thai banks are generally reluctant to lend to startups.

Human Resources Barriers: Creating Fintech startups requires specialized skills. Additionally, some populations lack access to digital payment systems due to limited knowledge.

All these issues do not mean Fintech will not change; financial technology may grow gradually in line with global trends. Each challenge requires time and effort to resolve. Especially regarding legislation, the government should open opportunities for experts and digital nomads to participate in building businesses, which will help Thai startups expand internationally and attract foreign investors, creating more income and employment opportunities.