FinTech, Financial Literacy, and Consumer Saving and Borrowing: The Case of Thailand
While the adoption of fintech is expected to help raise consumer awareness of financial products, digital financial literacy will also be needed to help reduce the digital divide.
Financial services in Thailand are undergoing rapid transformation. The adoption of digital payments has been growing at an exponential rate, thanks to various collaborative initiatives between the public and private sectors, as well as competition between financial services providers themselves. In the future, with mobile banking penetration reaching a critical level, competition for digital savings and borrowing products is also expected to be fierce. Although financial technology (fintech) is expected to promote financial inclusion, and encourage better financial literacy, many challenges remain. We first review the results from the Thai Households Financial Access and Literacy Survey, a bi-annual survey conducted by the National Statistical Office, in collaboration with the Bank of Thailand, which reflect the current stage of financial inclusion and financial literacy in Thailand, as well as potential areas for improvement. We present a conceptual framework of the connections between FinTech, financial behavior, and financial knowledge and attitude, to reflect the various feedback loops that policies could use to address. We then review a three-pronged strategy aimed to promote FinTech, financial inclusion, and financial literacy in Thailand: (1) development of interoperable infrastructures that are key foundations of a digital economy; (2) introduction of supportive laws and regulations that help foster FinTech innovations and; (3) promotion of financial literacy at various fronts for people at various stages of life. We then discuss the preliminary results of the three-pronged strategy for the provision of financial services, financial behavior, and financial literacy. We conclude by presenting insights and key learning drawn from the Thai experience, which could also be useful for policy makers in other jurisdictions.