How Thailand’s state-owned ‘social bank’ is tackling inequality with open source

By Red Hat

Thailand’s Government Savings Bank aims to be a ‘social bank’ that supports the underbanked and lower income communities across the country, and has turned to open source technology to drive digital transformation and realise its mission.

Thailand's Government Savings Bank uses open source to build a large open banking ecosystem, drive digital transformation, and serve the public good. Image: Government Savings Bank, Facebook

Over the past two years, Thailand’s state-owned Government Savings Bank (GSB) provided nearly 50 billion baht (1.5 billion USD) worth of loans to support low-income earners, small business operators and community organisations as part of its social mission, said Mr Vitai Ratanakorn, President and CEO of the financial institution to The Bangkok Post recently.


Rather than focusing on shareholder profit, the bank focuses on nurturing the wealth of the Thai people. It operates as a social bank that aims to alleviate poverty and inequality amongst the underbanked and lower income communities in the Southeast Asian nation. It currently runs over 1000 branches across Thailand, serving more than 22 million customers.


Thailand is projected to become one of Asia-Pacific’s largest economies by the 2030s according to S&P Global Market Intelligence. GSB plays a critical role in realising national policies that aim to reduce inequality and promote upward mobility, such as the 13th National Economic and Social Development Plan.


Currently, the bank is building a large open banking ecosystem supporting young people, students, and blue-collar workers as part of its commitment to the country’s sustainable development goals.

Improving service delivery with microservices


During the Covid-19 pandemic, GSB was able to launch unsecured Covid relief loans within a month through the bank’s mobile app, MyMo, and provide over 300 billion baht (nearly 900 million USD), to low-income earners.


The bank shifted the entire loan cycle, from application to repayment and debt restructuring, to digital self-service on the app. Now, the app can process more than 400,000 loan applications in a single day, according to an interview Ratanakorn gave to The International Banker.


Mobile apps are essential towards servicing customers in rural areas, who face higher costs in traveling to physical banking outlets, explained Ratanakorn. The bank has introduced essential yet user-friendly services on the app, such as digital lending and electronic debt restructuring to reach rural communities, he said.


This would not have been possible without GSB’s prior migration to an open source environment. 


By adopting a modular, microservices-based infrastructure that runs on Red Hat’s container platform, GSB has been able to maintain, modify, and scale existing services while keeping other applications and workloads running. This means that GSB can update one application independently without affecting the operation of other services.


“On the previous platform, the bank used one software package for everything. When there was a problem, it required a whole system to be built up and deployed, which led to downtime. The good thing about open source is the ability to upgrade at any time,” said Sarawut Nanakorn, Senior Executive Vice President of GSB’s Digital Banking Group in an interview with Red Hat previously.


According to Red Hat, GSB also simplified the development process by adopting agile methodology and DevOps. In turn, this has allowed the bank to roll out and scale new digital products in a quicker time frame to customers and attract better talent.

Reaching more citizens through partner integration


The bank has also used open source technology to work with a broader range of partners and reach more underprivileged residents. This includes mobile phone networks, life insurance companies, at-the-counter payment services, and 7-Eleven stores.


“Customers can deposit money at the counter services which we offer through 7-Eleven stores all over the country. It is a real-time service through the API, and the money goes into your bank account straightaway,” said Nanakorn.


Previously, GSB’s legacy digital platform lacked the scalability and flexibility to support onboarding an increasing number of partner integrations, a vital element of open banking.


By replacing its legacy platform with Red Hat Integration, running on Red Hat OpenShift, the bank developed an open banking platform to host its APIs and provide managed services to third-party providers with comprehensive security access controls.


“In this market, it’s become impossible to expand past a certain point by yourself. You need partners that specialise in the services demanded by your customers,” said Nanakorn to Red Hat.


“With an open banking approach supported by Red Hat Integration and 3scale API Management, we have made the onboarding experience easier for our partners. As a result, we can create and deliver the features our customers want faster.”


This open platform connects MyMo and in-branch tablet devices to its core banking services, allowing customers to access critical banking services from banking outlets, stores, and their phones at their own convenience.


GSB was the first bank to offer customers the ability to withdraw and deposit money at 7-Eleven in Thailand in 2018, before other banks followed suit, according to Nikkei Asia.


This approach has been so successful in reaching more customers that Thailand’s Digital Government Development Agency has enabled citizens to access the government’s own online services in 7-Eleven stores, GovInsider previously reported.

Tapping on open source’s security features


Finally, open source technology has enabled GSB to improve the security and privacy of customers.


Through 3scale API Management, GSB has been able to manage partners’ access to necessary data and other resources. The bank also uses 3scale API Management to manage GSB’s Personal Data Protection Act (PDPA) system.


In addition, open source offers a higher level of security as developers can constantly review code for vulnerabilities. Vincent Caldeira, Chief Technology Officer of Red Hat APAC, previously shared with GovInsider that security fixes arrive much faster on open source software as compared to proprietary software.


Now, GSB is focusing on creating additional APIs to continue expanding its partner network and business models, as well as migrating all of its legacy integrations to Red Hat Integration.


In 2020, the bank was awarded the Red Hat APAC Innovation Award in the category of cloud-native development for its innovative use of Red Hat enterprise open source software solutions.


To read more about Government Savings Bank’s partnership with Red Hat, you can access the case study here.