As part of the 2024 FinTech Business Development Mission to Hong Kong and Thailand, we arrived in Bangkok late in the evening from our first stop in Hong Kong. The next day, our managing partner, Paul Schaus, and I met with the U.S. Embassy for a briefing and discussion of key financial statistics within Thailand. Sitting in a luxurious meeting room in the St. Regis, we discussed Thailand’s forward momentum in the digital economy, internet use, and mobile commerce. Thailand ranks fifth in the world for mobile banking users, even though it remains heavily reliant on cash transactions. We learned that, unlike Hong Kong, which is dominated by financial institutions, manufacturing is king in Thailand. Dynastic companies hold the majority of wealth and control, alongside the major banks, and they tend to take a cautious, middle-of-the-road approach.

We were especially looking forward to our next meeting with the Thai Fintech Association, as many delegates with us were representing their fintech companies, eager to see if they could connect with banks in Thailand. This is where the stark difference between Hong Kong and Thailand became apparent. In Hong Kong, things move quickly. New innovations are tested and implemented at rapid rates. But in Thailand, tight regulations severely hinder growth and collaboration, particularly with foreign fintechs. The takeaway was clear, as with generational control over manufacturing companies, the long-established “big banks” and government control everything.

I felt a bit discouraged heading into our next meeting with Thailand’s Ministry of Finance. If the Thai Fintech Association was pessimistic, how would the Ministry respond to new ideas from the West? The answer, unsurprisingly, was unreceptive and uninterested. The only aspect that surprised me was how many officials were unfamiliar with emerging topics like AI, tokenization, carbon taxes, and quantum computing security issues. They even jokingly asked if any of the delegates could demonstrate tokenization in the real world. Regulatory constraints and a preference for the status quo became even more obvious.

Our next stop was the Bank of Thailand, Thailand’s central bank. Entering their impressive building adorned with rather intimidating art, we were presented with a clean, polished PowerPoint reaffirming their commitment to strong regulation and stability. I was beginning to lose interest when they mentioned the changes they implemented during COVID. Thailand uses QR instant payment systems that can be linked to users’ bank accounts, biometrics, utilities, homes, and IDs, and instant payment processing systems at an unusually high rate. More and more people are using QR payments over cash, though security issues like fraud and phishing are major concerns. It’s remarkable that, despite preferring cash, people in Thailand are comfortable with their entire identity being linked to the big banks and government.

That evening, we met with local stakeholders in the financial and fintech sectors, where similar themes emerged. Thailand’s financial sector is a closed loop and challenging to break into. While there are programs and incentives for new fintechs, even local teams have slim chances of joining the ranks of major players.

The next day, we visited Krung Thai Bank where we heard a similar presentation to the Bank of Thailand. This was followed by a less than encouraging trip to the SEC, which offered little interest or insight into the delegates’ ideas.

Our final stop was a meeting at Bangkok Bank. Everything, including the art, felt more welcoming. The bank’s senior executive vice president, a UK native, was jovial and engaging. When it came time for questions, he engaged in a lengthy conversation about carbon taxes and ways to monetize them, and he showed a keen interest in the credit card security tools presented. Despite acknowledging regulatory limitations, Bangkok Bank saw potential in what the delegates offered and highlighted Thailand’s instant payment processing via QR codes as a sign of openness to change. They hinted that there are entry points for fintechs with the right connections. Bangkok Bank’s mentality reminded me more of Hong Kong than anything else we had seen in Thailand, leaving our delegation hopeful and excited about exploring opportunities, even within this legacy-driven environment.

Thailand’s financial atmosphere, much like its busy streets, reflects an attempt by the big banks to manage the wild diversity that exists there, yet the people show a willingness to adapt and embrace change. There’s a surprising trust in the government and banks, but people are still seemingly free to live their lives as they choose. While the banks may resist significant change, they don’t appear to be imposing restrictions on the people’s way of life. Their focus actually seems to be on improving lives rather than reshaping them. With this final thought, I’m left optimistic about Thailand’s willingness to adapt and collaborate with new technologies, as well as for their future, security, and growth within the world of global finance and fintech innovation.