Bigtechs already have a material footprint in financial services, and not least in payment services: Amazon Pay operates in 10 countries, Google Pay in 22 countries and Apple Pay in 25 countries. Facebook Messenger allows peer-to-peer payments in 3 countries and a Facebook wallet is reportedly in preparation. Moreover, Bigtechs like the GAFA companies have competitive advantages in terms of expanding their activities further in this area, including massive financial resources to strong brand recognition, a worldwide customer base and privileged access to cutting edge technologies. Therefore, Bigtechs more than Fintechs have the potential to fundamentally redefine financial intermediation: not to recreate the universal banking model, but rather to integrate the entire landscape of financial services into their own digital ecosystems. This does not mean that banks will be disintermediated; but rather that banks may be interfaced by Bigtechs’ platforms. Such a move is already gaining considerable traction in China. So, to conclude on the new players emerging in the digital era and their impact on financial intermediation, digital finance may not lead to a more decentralised system as the centripetal forces of network effects may benefit large conglomerates the most. Rather than eliminating intermediation, if left on its own, digital finance will more likely lead to reshuffling the cards, with the most digitally-agile incumbents and the most financially-able challengers becoming the new dominant (and potentially systemic) intermediaries. (B) Beyond native digital intermediaries, we have also witnessed the steady growth of the asset management industry in the wake of the great financial crisis.

On the other hand, from the perspectives of consumers themselves, greater demand for funds and financial services is often constrained by limited financial access. The appropriate course of policy on financial institutions must take into consideration challenges posed by these trends of changes. In this context, the Bank of Thailand sees three policy priorities going forward: (1) to preserve the soundness of the financial institution system, (2) to enhance the efficiency of financial intermediation, and (3) to place emphasis on consumer protection. The soundness of financial institutions is the major foundation of macroeconomic stability. Currently, financial institutions are in top conditions, with NPL ratio last year as low as 3.6 despite credit expansion of 11.3 per cent. Banks’ capital is also much higher than recommended international standards. This strong soundness must be preserved. The Bank  2  BIS central bankers’ speeches  of Thailand will continue to apply micro-prudential approach to the regulation of financial institutions, to ensure that financial institutions put in place appropriate risk management framework, are prudent in extending credits, and maintain sufficient level of capital according to new international standards such as the Basel III guideline. The recent global economic crisis highlights the importance of extending the coverage of supervision to foster the soundness of system as a whole, in addition to individual institutions. “Systemic risk”, in particular, can pose serious threat to macroeconomic stability at large.