Featured Product

    BOT Consults on Digital Repositioning of Financial Sector in Thailand

    February 01, 2022

    The Bank of Thailand (BOT) is consulting on repositioning the financial sector for a sustainable digital economy and has set out the underlying principles and policy directions in for this. The repositioning of the financial sector should strike the right balance between promoting innovation and managing risks as well as allowing for flexibility in dealing with abrupt changes. BOT expects the financial sector to leverage on technological advancement, facilitate the transition of businesses and households in adapting to a digital economy, effectively manage environmental risks, and be resilient to significant and emerging risks. BOT invites comments and suggestions on the consultation by February 28, 2022.

    The consultation provides key policy directions, in the following areas, for repositioning the financial sector:

    • Leveraging on technology and data to drive innovation and better financial services through open competition, open infrastructure, and open data. Open competition involves an expansion of business scope, more flexibility in business operations of both bank and non-bank financial institutions, and setting up of virtual banks to stimulate competition. Open infrastructure aims to allow more players with access to the key infrastructure at fair and reasonable costs. Key infrastructure includes the payment systems, the retail central bank digital currency, and the credit guarantee mechanism suitable for diverse funding needs. Open data aims to allow consumers to conveniently share their data stored at one service provider with other service providers for their own benefits under the Open Banking initiatives and to connect financial sector’s databases with other sources for better analytics and development of financial innovations and services.
    • Managing the transition toward sustainability by steering the financial sector to incorporate environmental risk assessment into their business operations and to support the transition of businesses away from environmentally unsustainable activities without disrupting the economy. The financial sector has an important role to play in facilitating households and vulnerable groups to adapt to the new, evolving economy. The financial sector should facilitate the households, particularly vulnerable groups with high debt burden or those lacking financial and digital literacy, to adapt sustainably. Actions include ensuring responsible lending, putting in place a holistic debt resolution mechanism, and encouraging risk-based pricing. On top of this, the financial sector should help promote financial and digital literacy to ensure sound financial behaviors of households and to raise awareness about new financial frauds.
    • Adopting a more flexible approach on supervision that will enable financial service providers to adapt, innovate, and effectively manage new types of risks. Risk proportionality framework will be applied to a wider range of financial service providers and adopt a combination of a rule-based approach to set standards or minimum requirements and a principle-based approach that enables service providers to adopt risk management processes suitable to their risk profiles. Furthermore, regulatory impact assessment will be carried out to lessen excessive regulatory costs on the financial service providers. A non-disruptive license revocation mechanism needs to be in place for service providers that do not conduct businesses in an appropriate manner. Moreover, it is important to focus on effective regulations pertaining to systemically important players in order to reduce systemic risks, which could threaten overall financial stability, depositors, and financial service providers. For instance, risks to financial and payment system stability posed by digital assets and risks of new business models of banking groups will need to be addressed.


    Related Links


    Keywords: Asia Pacific, Thailand, Banking, Regtech, Fintech, Open Banking, Sustainable Finance, ESG, Proportionality, Lending, Risk-based Pricing, Digital Banking, Open Data, BOT

    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588