This may, for example, include microfinance bank, custodial or trust bank, Islamic bank, and investment bank. Such entry would depend on the value added generated for the economy, in terms of increased efficiency in services, and expanded access to underserved segments. In the last year of the Plan, 2014, we may also consider entry in terms of full commercial bank license, if this adds value to the economy, through serving Thailand’s international trade and investment interest, including trends in regional integration. We will also work on improving and developing necessary financial infrastructure to support banks and other microfinance service providers in reaching this untapped market. And for the still missing pieces of the jig-saw, SFIs will take the lead. On the third pillar. There are five key areas of financial infrastructure improvement. First, in response to changes in customer needs that are becoming more complex, efforts would be made to enhance the capability and tools for risk management of financial institutions, including credit, market, liquidity, and settlement risks. Secondly, there needs to be improvement in the information system for risk management of financial institutions to help them in strategic planning and service expansion, while of course, ensuring appropriate protection of client confidentiality. Thirdly, financial laws that support risk management of financial institutions in dealing with credit risk and NPL and NPA management would be reviewed.

With all of these keywords in mind, measures under the Financial Sector  2  BIS Review 20/2010  Master Plan Phase 2 are grouped into three main pillars, aimed to tackle the following tasks: first, reducing system-wide operating costs, namely regulatory and legacy NPL and NPA costs; second, promoting competition and financial access; and third, strengthening financial infrastructure. On the first pillar. In any business undertaking including banking business, operating cost reflects efficiency and while this translates to cost of consumers through pricing of services, it also affects competitiveness of the industry. The latter point is particularly true, given the trend toward further financial globalization and liberalization. As such, the first pillar would focus on reducing two important operating costs for the whole financial system, namely regulatory cost and legacy NPL and NPA cost. Next, on the second pillar. It is envisaged that competition would be strengthened through new entries and expansion of existing service providers’ business scope. In so doing, efficiency would be enhanced through more competitive pricing and service quality and greater opportunities for broader financial access would be introduced. As for financial access, the idea is to encourage and facilitate the market mechanism by commercial service providers. To achieve this, we will help banks identify where the unmet demand is and encourage them to explore and adopt suitable microfinance business models. For new service providers, we will consider providing opportunities for those with business model and expertise that can help further enhance market completeness, to enter the market under a restricted license.