Monday, 27 May 2024

LINE BK expands into wealth and insurance services

5 min read

By Chris Kapfer and Jeff Villapando

Digital bank LINE BK is diversifying into wealth management and SME lending to strengthen its position as a holistic financial service provider

  • KBank’s partnership with LINE redefines loan services and credit scoring in Thailand
  • Digital innovation and comprehensive financial solutions
  • Expands offerings into micro wealth and insurance products

LINE BK, one of the leading social financial platforms in Thailand, is embarking on a strategic journey into wealth management and lending to small and medium-sized enterprises (SME), using innovative approaches to customer onboarding.

The joint venture company of Kasikornbank (KBank) and messaging platform LINE has seen notable growth since its launch in 2020. It became the first project approved by the Bank of Thailand for banking services on a platform other than its own.

It provides online banking and personalised loans through LINE’s app that has 90% user penetration among Thai consumers. LINE BK is one of the few bank-platform ventures in Asia that has yielded substantial benefits for both players.

LINE BK has improved the customer onboarding experience by reducing unnecessary application data input. The digital bank has redesigned its user interface and developed on-boarding flows to support exceptional cases.

Customers who are not KBank account holders can sign up directly on the LINE BK app. As a result, it has acquired 5.2 million users as of 2022, up from 3.8 million in 2021, solidifying its position as the leading digital bank in Thailand. LINE BK ranks 71st in The Asian Banker’s Global Top 100 Digital only Bank Ranking.

Digital innovation and comprehensive financial solutions

KBank connects seamlessly with the LINE platform’s front-end. LINE BK provides flexible lending options, and offers two types of loans: credit line and nano credit line. The average loan size for the credit line is approximately THB 35,000 ($1,000), and around THB 11,000 ($314) for the nano credit line.

Outstanding loan balance increased 100% from THB 9 billion ($251 million) in 1H2022 to THB 18 billion ($503 million) in 2H2022. It is expected to acquire THB 5 billion ($139 million) in new loan outstanding in 2023 driven by its lending options. LINE BK goes beyond traditional data and leverages behavioural data to build its credit scoring and predictive models, positioning itself as a key player in consumer finance. The company claims that more than 30% of its customers have never had access to credit before.

The expansion of consumer finance and wealth is built on LINE BK’s existing digital infrastructure, allowing customers to access and manage their wealth, as well as apply for and manage loans seamlessly through their mobile devices.

Expands offerings into micro wealth and insurance products

LINE BK is also set to offer wealth management services and products are expected to include an investment advisory, portfolio management and retirement planning. With this expansion, Line BK seeks to address the needs of individuals looking for comprehensive financial solutions beyond traditional banking services.

In collaboration with Muang Thai Life, a life insurance company, LINE BK plans to introduce an insurance brokerage service in the third quarter of 2023. The partnership will allow customers to explore and purchase a wide array of life and health insurance products directly through LINE BK’s platform.

LINE BK’s primary goal is to democratise insurance by providing small-ticket insurance options and delivering a streamlined, digitised experience that empowers users to take control of their insurance needs through convenient self-service channels.

Kris Lerdchanapornchai, head of banking and business strategy at Kasikorn LINE emphasised that LINE BK’s expansion into insurance brokerage and investment service is part of a broader strategy to enrich the service portfolio. This expansion positions the digital bank as a comprehensive banking platform, reshaping how customers manage their finances and access a wide spectrum of financial services.

Kris Lerdchanapornchai, Head of Banking and Business Strategy, Kasikorn LINE
He added that LINE BK places a strong emphasis on customer experience and provides a better onboarding process compared to its competitors.

The company is actively seeking partnerships and ecosystem integration to enhance its offerings. By leveraging data and strengthening customer connections, LINE BK has already established strategic collaborations with prominent players in the food delivery sectors, such as LINE MAN Wongnai in Thailand.

Keywords: Lending, Wealth Management, Sme Loans, Online Banking, Personalised Loans, Profitability, Customer Experience
Institution: LINE BK, Kasikornbank, LINE MAN Wongnai, Muang Thai Life, Bank Of Thailand
People: Kris Lerdchanapornchai
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