In order to make Thai banking sector to stay resilience and competitive in the more open market, we need to explore and analyze the impacts of AEC on both practitioner and regulator sides. 1  Taken from the “Declaration of the ASEAN Economic Community Blueprint”, 20 November 2007  BIS central bankers’ speeches  1  Ladies and Gentlemen, I would like to talk firstly about the impacts of AEC on financial institutions, and secondly on the role of central bank for small economy like Thailand. For financial institutions, the AEC can give both opportunities and challenges. Obviously, financial institutions will benefit from market expansion and the increasing in cross-border financial and trading activities as well as revenue remittance. However, the AEC will induce higher competition and more risk exposure. To maximize benefits and minimize any negative effects, financial institutions need to adjust their business to the changing environment. Truly understanding customer demand, business culture, and regulatory requirement of other ASEAN countries are inevitable. In the midst of this process, there are three words that management may need to take into consideration. The keywords are connectivity, innovative, and efficiency. •  Connectivity: the connection that can reach to customers in the region will be an important criterion to maintain or increase international competitiveness of financial institutions. These can be done through traditional ways of correspondent banking or establishing new networks and presence in other countries.
I would like to conclude here that, to join the AEC in 2015 both central bank and financial institutions need to have proactive strategies to deal with the changing economic and social environments. The central bank will play an important role in supporting private sectors and ensuring the stability and efficiency of financial system and infrastructures. Concurrently, the financial institutions need to rethink and redesign their business processes and strategies in order to stay at the forefront of highly competitive environment as well as to reap the full benefit of the integrated economic community. Thank you. 4  BIS central bankers’ speeches