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Capability Development

The Banking Sector

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Banking on Innovation

Part of the book series: Contributions to Economics ((CE))

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Abstract

We have seen that the Asian economies studied have undergone considerable changes in payment systems and that this has affected commercial banking. In this chapter we show in detail how innovation has occurred in the Thai banking sector. In Thailand banks were placed under enormous pressure to innovate in the mid-late 1990s first by a push towards financial services liberalisation, followed closely by a major financial crisis. In this transformative period numerous innovations arose and we show how the banking community responded to them and the means by which they were disseminated and implemented. We assess survey results that illustrate the broad indicators of innovation. We apply these assessments to IT introduction and usage in the commercial banking industry, the level of automation among types of payment routines, and the major sources of commercial bank capabilities contributing to, or constraining, innovation.

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Notes

  1. 1.

    1 The study of innovation in Thai banks follows the 1997 Asian financial crisis up to 1999. As of 2008, some financial institutions noted in the case study have closed or merged with other entities. See http://www.bot.or.th for up to date information.

  2. 2.

     In 1997, the bank increased its capital at 2.9 billion baht. Part of the new shares was acquired by United Communication Industry (20 million shares), Multimedia and Services Company (15 million shares) and Total Access Communications (15 million shares). The latter two firms are subsidiaries of United Communication Industry (UCOM).

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Author information

Authors and Affiliations

  1. University of Westminster and Bank of Thailand, Bank of Thailand, Pranakhon, 10200, Bangkok, Thailand

    Dr. Tanai Khiaonarong

  2. Department of Management Information Systems and Innovation Group, London School of Economics and Political Science, Houghton Street, WC2A, London, UK

    Dr. Jonathan Liebenau

Authors
  1. Dr. Tanai Khiaonarong
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  2. Dr. Jonathan Liebenau
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Correspondence to Tanai Khiaonarong .

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© 2009 Physica-Verlag Heidelberg

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Khiaonarong, T., Liebenau, J. (2009). Capability Development. In: Banking on Innovation. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-2333-2_6

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