Following a major initiative by the Bank of Thailand to regulate AI use in the financial sector and enhance the country’s financial efficiency, operators must closely examine and understand the new structure to mitigate risks. Forvis Mazars emphasizes eight potential risks and advises financial institutions to monitor policy developments post-implementation. To navigate these changes, organizations must adapt their operations to ensure transparency, ethical standards, and readiness for emerging factors.

Tippawan Pumbansao, Financial Services Audit Partner of Forvis Mazars in Thailand, stated that in response to the Bank of Thailand’s draft on AI risk management in the financial sector—which covers all financial services and aims to create a more organized financial system—financial companies must adapt to the evolving environment and remain vigilant of the following eight key risks:

1. AI Governance: New regulations require serious attention. Financial institutions must invest in tools and personnel to meet regulatory expectations, and establishing dedicated operations are essential to prevent future errors.
2. OCEC Global Minimum Tax (Pillar Two): Designed to manage complex multinational taxation, especially for large corporations receiving Board of Investment (BoI) privileges. Companies must review tax frameworks, balance sheet liability methods, and financial disclosure readiness. Compliance will involve detailed reporting, active tax credit management, and maximizing existing privileges.
3. Reducing Policy Interest Rate: The Bank of Thailand has lowered the policy interest rate from 1.75% to 1.5%, the lowest in over two years, due to disinflation, high household debt, sluggish tourism, and elevated US import tariffs. Amid political uncertainty, organizations should reassess asset valuations and fundraising strategies. They are advised to review stress test assumptions and prepare precautionary plans to address the direct and indirect impacts of lower interest rates.
4. Virtual Banks: This flexible, fully digital business model challenges traditional institutions to encourage digital platform usage and retain clients. Risk management frameworks should be experimental to handle intensified competition, and digital transformation must be strategically planned.
5. Non-Performing Loans (NPLs): In Q1 2025, NPLs in the banking system rose to 548 billion baht, primarily from housing and SME loans. Forvis Mazars advises strict credit risk calculations, adherence to credit allowance requirements, and robust bad debt provisioning aligned with the expected credit loss approach.
6. Cybersecurity: As digital transactions increase, there are potential threats. Operators must scrutinize payment processes and develop cybersecurity threat models, supported by flexible contingency plans.
7. Digital Assets: A high-risk market with tightened regulations to combat money laundering (AML/KYC), including digital asset custody and crypto risk assessments. Risk management frameworks must be tested thoroughly, covering client onboarding, tracking, and compliance reporting. Internal audit teams must possess specialized expertise to manage these risks effectively.

8. Creditworthiness Report: Under Thai Financial Reporting Standard 17 (TFRS 17) for Insurance Contracts, the 2025 tax year introduces new performance reporting requirements. Insurance companies face challenges in data completeness, system readiness, and reconciliation processes. Rigorous checks are essential to ensure compliance, particularly regarding earnings volatility, capital adequacy, and peer performance comparisons. Forvis Mazars recommends expert consultation offering integrated finance, tax, and IT services, along with meticulous preparation of audit documentation.

Tippawan added that Thailand’s financial services sector may experience changes sooner than anticipated due to regulatory reform, economic sluggishness, and digital transformation. Forvis Mazars offers strategic, tax, and risk management solutions through a one-stop service, helping corporations navigate challenges and seize opportunities with confidence.