Today, let's analyze the news about banks announcing free fees, from a Business Analyst with Strategic Management by RDBI perspective
Both SCB and KBANK are breaking the mold with
unlimited free interbank and inter-district money transfers,
free unlimited bill payments for goods and services, and
free unlimited top-ups for all types of mobile phone credit.
Although TMB and Krungsri did it before, it didn't have a widespread impact
because they might not have had that many customers. But now every bank is starting to get aware of it,
and even KTB has announced it (March 28, 2018).
How big of an issue is this? What are the impacts?
What other impacts does this have?
– Customers will no longer transfer money via ATMs because it incurs fees.
– Customers will switch to transferring money via mobile phones, and there will be no fees regardless of which bank or location in Thailand they are transferring to.
And how will the banks be affected?
– Bank fee income will immediately decrease.
– They can reduce the number of ATMs.
– They can reduce the cost of managing ATMs, for example, reducing the number of ATMs in areas with low usage.
– They can also reduce branches. You may have already seen news about SCB reducing staff and branches back in January 2018.
– But the banks will have the money to circulate within the bank, drawing funds from counter services to circulate within the bank.
In terms of revenue,
this might result in a decrease in fee income for
. However, in terms of profit, in the long run,
banks benefit fully
– from having more working capital, allowing them to lend to customers using their own funds, generating more lending revenue
– or from investing in various companies, acquiring shares in other companies, and generating increased investment income.
Impact on bank employees
– Branch reductions and staff cuts will have the biggest impact on branch staff. Those who haven't adapted, are looking for other opportunities, or developing necessary skills could be among the first to be laid off in the future.
High-potential employees working in data-related fields will increasingly be in demand. The more you improve your skills, the more sought after you become in the market,
such as Business Analysts, Data Scientists, and Data Engineers.
What businesses will be affected?
– People will top up their mobile phones less often through top-up kiosks because mobile top-ups are free of charge.
– People will pay bills less often at Counter Service, Lotus, or Big C because paying bills via mobile is free of charge.
It's safe to say that many businesses are making major adjustments right now.
Seeing all the news, I really can't help but
analyze it and share it with others
so that companies, organizations, and consumers alike
are aware of the situation and need to adapt as well.
Nuchanat Rongrong
#RDBI
#BusinessAnalytics
#StrategicManagement
#BusinessAnalyst
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