Kasikornbank turns to AI, prudent lending as Thailand’s economy slows

GDP expected to grow by less than 2% annually over next 2-3 years

SINGAPORE – Thailand’s second largest lender Kasikornbank (KBank) is leaning on artificial intelligence (AI) and prudent lending to navigate economic headwinds and fraud risks, its chief executive Kattiya Indaravijaya told Reuters on Thursday.

The lender expects AI to have a “meaningful impact” on productivity improvement within two years, she said, adding that the bank is still at the early stages of getting every unit to adopt it.

For instance, she expects AI to help with the more obvious credit approval decisions, freeing up underwriters to work on applications that are less certain.

Ms Kattiya said the bank has had to be more prudent when it comes to lending, with economic conditions in Thailand still sluggish.

She noted that the nation’s gross domestic product (GDP) is expected to grow by less than 2% per year over the next two to three years, and that medium to long-term structural change is needed from the government.

Thailand’s economy is struggling with the impact of US tariffs on its exports as well as lower levels of consumption, with households mired in debt.

KBank’s chief executive Kattiya Indaravijaya. (Photo supplied)

A strong Thai baht is also threatening both exports and tourism, with the nation already grappling with a 7% year-on-year fall in foreign arrivals.

“Since 2022, we saw some signs that we need to be very careful, so that’s why we adjusted our credit policy,” she said.

The bank’s ratio of non-performing loans (NPLs) has improved as the bank is extending loans mainly to customers with whom it has a credit or payment track record.

While the bank has received offers on mergers or acquisitions of fintech companies, Ms Kattiya said that the bank is not actively studying any deals.

Any deals struck will need to align with the lender’s existing strategy and add value to both its customers and the bank’s shareholders, she added.

“We have to think very carefully before we make any decision, but there’s always choices,” she said.