Maybank Investment Bank sees virtual banking investment and expected increases in cyber-security spending as two key drivers for Thailand tech services sectors in the next two years.
The research house said in a report on Tuesday that it has a positive view on Thailand’s tech-service companies, thanks to their potential profit growth.
According to Maybank, the Bank of Thailand plans to issue three virtual banking licenses in mid 2025 and require the recipients to start operating by mid-2026.
“We estimate THB 3 billion ($89.37 million) to THB 5.7 billion ($169.81 million) capital expenditure (capex) by the virtual banks before they can start operating in mid-2026, implying new demand for tech services and system implementations,” it noted.
Maybank forecasts each of the three banks to invest THB 1 billion ($29.79 million) to THB 1.9 billion ($56.61 million).
It is noted that Kakaobank, a leading digital bank in South Korea, obtained its banking license in April 2016 and started operating in Jul 2017.
It is also noted that there are five groups of candidates for the virtual banking licenses, including: KTB’s partnership with ADVANC and OR; SCB X’s partnership with KakaoBank and WeBank, a prominent digital bank in China and; BBL’s partnership with VGI, Sea Group, Sahapat Group and Thailand Post; Ascend Money’s (owned by Ant Group and CP Group) partnership with Ant Group, and Thai fintech company Lighthub Asset’s partnership with WeLab, a pan-Asian fintech platform.
With only about 12 months to invest before the virtual banks have to start operating in mid-2026, Maybank expects heavy capex in 2H25 and the first half of 2026.
After mid-2026, it expects virtual banks’ capex to continue as they have to upkeep their information technology (IT) systems, add new products/features and improve scalability.
It noted they have already seen recurring capex from Kakaobank, and from 2018 to 2023, Kakaobank’s average capex-torevenue ratio was 3.3 percent.
Maybank also foresees five-year compound annual growth rate (CAGR) of 11 percent for the cyber-security market in Thailand.
Measuring the market sizes by using spending as a percentage of gross domestic product (GDP), it said the global cyber-security market was 3 times the size of the Thai counterpart in FY2023.
Also, it noted the country spent only 0.2 percent of corporate revenue on IT security, much lower than 0.7 percent in the United States and Canada.
Meanwhile, it opined that there is a high risk of cyber-attacks.
Cited the latest Threat Intelligence Report by Check Point Software Technologies, it highlighted Thai organizations have been subject to 1,892 cyber-attacks per week in the second half of 2023, much more than the global average of 1,040 per week.
The attacks mostly targeted government/military, manufacturing, and the finance/banking industries, it added.
It also noted that in 2023, Thailand experienced 109,315 ransomware attacks, the highest in Southeast Asia.
“Given the large room to grow and high risk of cyber-attacks for Thai organizations, Statista forecasts FY23-28 revenue CAGR of 11 percent for the cyber-security market in Thailand,” it added.
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