Krungsri Consumer, a provider of unsecured loans under Bank of Ayudhya (BAY), has removed its direct sales channel for credit cards and personal loan products and is gearing up for digitisation, aiming to catch up with consumers' changing lifestyles.
The unsecured lender has terminated outsourced contracts for the direct sales channel, mainly due to the channel's lower potential for customer acquisition and higher operating costs, said Thakorn Piyapan, head of Krungsri Consumer.
The company is continuing to develop the digital platform, which has received positive response from clients and will form another core channel.
BAY branches are the key contributor to Krungsri Consumer's new customers at 35-40%, followed by partnership networks with Central Department Store, Tesco Lotus and HomePro (30-35%) and digital and social media channels (less than 10%).
The bank has more than 600 branches nationwide.
"We expect the ratio [of new customers] from digital and social media channels to increase to 15-20% next year," Mr Thakorn said. "The channel can serve real demand with lower operating expenses, so it has high growth potential."
The company is taking aim at launching digital lending services, targeted at existing cardholders and personal loan customers, by the first quarter of next year. The service, which is a channel that customers can use to apply for personal loans, must be tested out in the Bank of Thailand's regulatory sandbox.
Krungsri Consumer, the country's largest provider of unsecured loans, aims to achieve its new card issuance target of 840,000 this year after 700,000 were put into circulation in the first seven months of the year.
The lender expects 8-9% growth in its credit card spending this year, compared with a 12-13% target, after growth stood at 7% for the first seven months of 2017.
In the meantime, Mr Thakorn, who is also chairman of the Credit Card Club, yesterday introduced the Smart Consumer campaign to encourage consumers, particularly university students and first-jobbers, to be more aware of financial discipline.
The campaign, a part of the Thai Bankers' Association's financial literacy project, encourages consumers to save at least 20% of total income per month. The improving financial discipline will help bring down the country's household debt, which accounts for almost 80% of GDP now.
