Smarter Payments

KBank On Rethinking Bank-FinTech Relations

Remittances had a record year in 2018 despite the frictions that still exist when senders move money cross-border to receivers in need. In the latest Smarter Payments Tracker, Khun Sarintorn, vice president of international remittance and business solution head for Thailand-based Kasikornbank, explains how FinTechs are helping banks introduce features that deliver transparency and certainty to those important global transfers.

Global remittances have been increasing, according to the latest data from the World Bank. Recent figures indicate that global remittance payments broke records last year, with $689 billion in remittances reported — a significant increase from the $633 billion reported in 2017. South Asia saw some of the highest remittance growth, with transfers increasing by 12 percent. Remittance payments might be on the rise in this region, but common pain points with cross-border money transfers have persisted, including a lack of transparency. This means senders and recipients can be left wondering when — or if — their funds will arrive. The World Bank also noted that it is expensive to send money across borders, with the average fee for transferring $200 at 7 percent in Q1 2019. Senders and recipients may become frustrated if such costs are not revealed prior to the transaction. 

Thailand-based Kasikornbank (KBank) recently took steps to address these and other common pain points in the country’s financial services sector by forging partnerships with FinTechs. KBank’s first vice president of trade finance and international remittance business solution head, Khun Sarintorn, explained that collaborating with FinTechs has caused the bank to reflect on how traditional FIs address issues. Sarintorn recently spoke with PYMNTS about how the company’s partnerships with FinTechs are changing its approach to financial services innovation. 

New Partnerships, New Innovation Perspective 

Sarintorn noted that KBank provides its customers with a wide range of services, including wealth management, corporate banking and international financing services. Other FIs in the region offer similar products, but Sarintorn said KBank stands out by embracing FinTechs’ assistance and innovations instead of viewing them as competition. 

“We have worked with several FinTechs to understand the way they think and how they manage customer needs,” she said. “It’s quite different from FIs like ours, [which] take time to build and develop their own solutions.” 

These partnerships have opened up new opportunities to better understand how FinTechs address consumers’ needs. They have also changed KBank’s perspective on innovation. 

“Previously, we had to start with big things, plan for a long time and then do them one by one,” said Sarintorn. “For FinTechs, they look at customers’ needs right away, find the pain points … and work to fulfill that need right away.” 

Enhancing Cross-Border Transfers

One of the most pressing needs these FinTechs addressed was removing some common frictions customers faced when transferring money overseas. Customers and recipients were often left in the dark regarding where money was in the transfer process and how much transactions would cost. 

“The pain point was that the customer never knew when the money [would arrive], when the beneficiary [would] get the money or the fees,” she said. “We asked, ‘How can we achieve full-payment so the beneficiary can get the money in full … and the senders know how much they’re going to be charged and [everyone] knows exactly when it gets there?’” 

The bank worked with its FinTech partners to overhaul the cross-border payment process to be more transparent, resulting in the launch of its new Global Money Transfer service. The offering allows funds to be received in either real-time or within three business days, depending on the transfer’s final destination country. Senders assume responsibility for transfer fees and are alerted by SMS or email when the transfer is completed. 

The service was well-received among KBank’s customers, Sarintorn noted, partly because customers have grown accustomed to faster payment speeds from domestic person-to-person (P2P) transfers. 

“People use digital platforms to transfer funds and trust the platforms already,” she said. “We bring … the opportunity to make cross-border payments to them.” 

Overhauling Digital and Physical Services 

KBank is continuing to pursue its partnerships with startups and larger tech firms in an effort to further improve its financial services. Recent collaborations include partnerships with social media giant Facebook to explore “social commerce” opportunities, Singapore-based rideshare and food delivery firm Grab and chat app LINE. 

The bank found that maintaining a strong physical network was also important. The company forged a partnership with Thailand’s postal service last year, enabling customers to make deposit transactions at approximately 1,300 post office locations. The move enables the bank to provide services to customers in remote areas that might otherwise be cut off from the nation’s financial infrastructure. 

“We believe the key to making KBank profitable in offline competition is to first know what we need to deliver and fulfill their needs,” she said. “The number of physical branches may not be relevant if we can utilize and leverage what we have and bring in more business.” 

A significant share of Thailand’s population uses smartphones, making this the most effective way to provide services, Sarintorn said. Some accounts note that more than 90 percent of the nation is connected to the internet via smartphone. 

Sarintorn added that her particular division will continue to look for ways to enhance KBank’s overseas fund transfer services capabilities. The bank is looking to adopt the ISO 20022 standard to make its overseas transfers more efficient and will follow this as a model for future services. Adopting the standard could also help Thai consumers more easily send money to new markets and connect with new banks. 

“We’ll keep working to make overseas transfers more efficient, fast and safe,” she said. 

Sarintorn learned that it takes partnerships to achieve goals like these. Consumers are demanding a more seamless and friction-free remittance and fund transfer experience, meaning FinTechs and FIs like KBank are on track to forge additional partnerships in the future. 



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.