Entering its 4th year, SCBX builds immunity for growth.

“From the day the structure was changed until today, which is entering the year 4. We've made our way, but haven't reached our intended goal yet. While there may be some unfavorable conditions along the way, we're moving forward to eliminate blind spots and build resilience for the banking business and SCBX Group, enabling them to grow sustainably in the future.

4 years of transformation from a bank
To the mothership organization SCBX

Back to September 22, 2564 "Siam Commercial Bank" Under the leadership of Athit Nanthawittaya The then CEO made a major splash by announcing a major corporate restructuring plan under a strategy called “Mothership” It is a restructuring from a bank to a holding company in the name SCBX Group Which has Athit sitting in command of the army in the position SCB EX Public Company Limited

As we enter our fourth year in 4, Athit stated that he initially envisioned the future of traditional banking to be severely disrupted, to the point where it would no longer be able to grow as before. Over the past nearly four years, he has faced numerous challenges, including COVID-2568 and other issues. However, he has demonstrated that banking continues to function as a cash cow, generating income and profits through ongoing efforts. However, he added that sustainable growth is key.

Sustainability is not limited to environmental issues, but also involves operating a business that can survive in an era of rapid change. Failure to adapt or face risks could jeopardize a bank's sustainability. Many approaches require investment time to demonstrate returns.

Therefore, what needs to be done is to close the "dead corners". Dead corners in this context are the limitations that prevent traditional banking from growing sustainably. For example, being a local bank may not be enough, or being unable to adapt to new technologies may be an obstacle.

At the same time, the bank's transformation into a technology service provider may face limitations stemming from its business structure. This is why we're restructuring the organization and establishing a new vision to expand beyond the banking business. We believe that developing innovation outside of the banking business is another way to strengthen the resilience of the bank and other businesses within the SCBX Group.

"Since the restructuring, entering its fourth year, we've made a significant step forward, but we haven't reached our goal yet. While there may have been some obstacles along the way, we're moving forward to eliminate blind spots and build resilience for the banking business and SCBX Group, enabling them to grow sustainably in the future."

The first year of Bank Plus
Banks grow - other businesses profit

Athit said that SCBX currently has 12 subsidiaries, ranging from large commercial banks like Siam Commercial Bank to small businesses like PointX, which provides rewards points redemption services and loyalty program development and maintenance.

“The origin of PointX is to leverage customer points earned from businesses within the SCBX Group to generate engagement. These points can be used extensively, connecting the group to the possibility that companies may not be profit-oriented, but rather as a weapon that can be used to support other businesses within the group, such as banking or credit card businesses.”

Gen 1 banking businesses are still able to grow strongly and have a more compact organization, enabling them to reduce operating costs. Gen 2 businesses have also experienced many setbacks. Some businesses, such as Card X, initially faced problems but have since been addressed and continue to improve. Other businesses that were once doing well may now face some problems and need to be addressed further.

SCBX Group divides its business growth into three stages: Bank Minus, when the primary source of revenue comes from the banking business while other businesses in the group continue to post negative revenue; and Bank Neutral, when profits from other businesses in the group are equal to those of the banking business. This stage has been observed throughout the past three years.

For the first half of 2568, SCBX Group's revenue entered the Bank Plus phase for the first time, as profits from other businesses within the group were positive, coupled with continued growth in profitable banking revenue.

"I'm proud that SCBX has managed to manage the organization so that the banking business can operate smoothly. Gen 2 and Gen 3 businesses have already generated additional profits for the group. This is an achievement that I consider myself to have passed."

Athit added that what remains unsatisfactory is that overseas investment, which involves expanding the country's land area to sow new seeds for future success, has yet to achieve its goals. Part of the reason for this failure is that regulatory oversight may prevent free flow of foreign investment, as strict risk controls are still in place, preventing much opportunity for new experimentation.

However, starting something too early can present challenges, both in terms of preparation and communication. Past experiences have provided SCBX with a wealth of knowledge and lessons learned, enabling it to learn from both successes and failures for further development.

Move forward to create Virtual Bank
“AI-native Bank”, the new flagship

SCBX Group is one of three companies that have been approved to establish a branchless commercial bank in Thailand (Virtual Bank) as announced by the Bank of Thailand (BOT) on June 3, 19, which is an important step in the strategic plan to become a “The most admired regional financial technology group” In collaboration with business partners including KakaoBank Corp., the largest digital banking service provider in South Korea, and WeTechnology Limited, a subsidiary of WeBank Group, a leading digital banking service provider in China.

Arthit said traditional banks are facing challenges in adapting their business models and adopting new technologies to serve customers, amid cost constraints and cybersecurity requirements. Using artificial intelligence (AI) can help increase efficiency and reduce operational costs, which can translate into benefits for consumers.

According to the regulations for establishing a Virtual Bank, the initial capital must be 5,000 billion baht for the first three years and thereafter must be increased to 3 billion baht. The investment budget for technology in establishing a new bank will be cheaper than the investment budget for technology businesses in traditional banks. This means that the foundation of a new bank, or Virtual Bank, will be created with AI technology.

The main strategy of the SCBX Group is to use AI to enhance the user experience of Virtual Banking in terms of convenience, security, and meeting lifestyle needs, or as it is called "AI-native Bank” with “AI-Butler” It acts as a companion that helps users make their life easier and more convenient, such as searching for flights based on their budget and making payments directly from their bank accounts. Initially, the focus may be on customers interested in AI, but it's believed the new bank will eventually reach the general public.

“AI-native refers to banks that operate primarily using AI systems. They may not have a call center, but instead use AI-butlers. This allows users to easily access personal information with a single button in the app, creating a more seamless customer interaction and service model.”

Furthermore, the new SCBX Group's initial core products will be deposits, payments, and loans. They must be designed to appeal to target groups interested in AI and create a compelling appeal that encourages consumers to try them. If they fail to attract enough interest, consumers may not see the need to use the service, as they can already use their existing banking services.

Furthermore, if this can be implemented to ensure that all user groups have access to services at lower costs, it will help expand the market to underserved groups who lack access to financial services, who will receive services at lower prices than before. This development has already begun and is expected to be available by mid-2569, in line with the BoT's deadline.

“By laying the foundation for an AI-native virtual bank, results may not be immediate, but we can prepare for the time when we need to step out of this predicament. SCBX will have a strong structure to support growth for the bank and its businesses, with the virtual bank as its new flagship, further enhancing stability for the group and its shareholders.”

Ready to send the baton
The new “CEO”

In this regard, SCBX Group has announced the appointment Dr. Arak Suthiwong He will assume the position of new Chief Executive Officer of SCB X Public Company Limited, effective January 1, 2570, taking over from Athit, whose term will end on December 31, 2569.

Athit said that in recent years, the gap between leaders in organizations may have become too great, leading to the selection of the successor to the CEO position being held more than a year in advance to allow time for the transition and closing of the gap.

The selection process has been intensive, starting in late 2567, with a formal search committee formed and the hiring of Egon Zehnder, a global leadership consultancy known for its leadership selection of numerous large organizations. Five candidates were eventually selected who met the required qualifications.

The new SCBX leader must possess the right qualities for the organization's future. Crucially, he must be able to work closely with regulators, earning their trust. Furthermore, he must be able to attract talented, young professionals. Many organizations primarily employ internally developed talent. SCBX, however, does not primarily employ internally developed talent, but rather recruits talent from outside. Therefore, the organization's leadership is tasked with ensuring a balance between the organization's personnel and the organization's internal resources.

Furthermore, the new leadership must create a corporate culture that is responsive to technology. SCBX has a large workforce with technology backgrounds, requiring organizational processes to be adapted to align with a holistic approach to technology. For example, areas like finance, risk management, and governance must all be based on a technology foundation. This will foster a culture of transformation within the organization towards true technology.

"The new leader of SCBX must envision the future of the organization and possess key characteristics that are appropriate for the organization. Once we have found the right person, we've now had about a year and a half to begin inducting him into the board of directors for both the banking business and the SCBX Group. We've been having weekly one-on-one meetings to begin the handover process. Because our organization is so large and diverse, it takes time to build mutual acceptance."

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