PATTAYA, Thailand – Victor Thai Law Firm once advised a foreign client who entered Thailand to conduct business fully in compliance with Thai law. Several years earlier, this client had received a bank transfer from a bank located in one of Thailand’s neighboring countries. The transaction was personal in nature and bore no indication of illegality. However, when he later incorporated a company in Thailand and applied to open a corporate bank account, the bank rejected his application, stating that he had been classified as “high risk” under its internal compliance system.
Upon further inquiry, it became apparent that the earlier inbound transfer from the neighboring country had been recorded within a risk database linked to Thailand’s anti-money laundering and mule account monitoring systems. Today, Thai banks rely on multiple integrated compliance sources, including Suspicious Transaction Reports submitted to the Anti-Money Laundering Office (AMLO), Supervisory guidelines issued by the Bank of Thailand, The Central Fraud Registry (CFR), which facilitates interbank risk data sharing, Cross-border transaction data subject to Enhanced Due Diligence (EDD) classification.
Although the client had no criminal record and the funds in question were not connected to any unlawful activity, the algorithmic risk-based automated screening system categorized him as requiring enhanced review. In practice, the bank chose a policy of “de-risking” rather than conducting an in-depth discretionary assessment.
From an individual case to a systemic reflection
This case is not an isolated incident. Rather, it reflects a broader structural shift in Thailand’s banking sector in 2026, driven by mounting pressure to combat cybercrime, call-center scam networks, and the widespread use of mule accounts in money laundering schemes. Over the past two years, regulatory measures have focused on cutting off illicit financial flows as swiftly as possible. Banks are required to detect and suspend suspicious transactions immediately. Real-time behavioral transaction monitoring systems have been widely implemented. Risk assessments no longer focus solely on current transactions but may incorporate historical data spanning several years. The result is what may be described as “accumulated risk” a risk flag that may follow a client indefinitely, without a clearly defined expiration period.
“Grey Money” and the blurred line of risk
In practice, the term “grey money” does not necessarily mean illegal funds. Rather, it refers to funds associated with certain risk indicators, such as Originating from jurisdictions categorized as higher risk, Transaction patterns inconsistent with the customer’s financial profile, Transfers routed through multiple intermediary accounts. When regulatory systems are designed to “freeze first and verify later,” both wrongdoers and legitimate individuals may be affected. In response to heightened regulatory expectations, many banks have adopted a de-risking strategy meaning that where risk indicators appear, even absent proven illegality, banks may decline account opening applications or suspend services to minimize potential liability.
Implications for foreign nationals and investors
For foreign nationals, particularly those with prior cross-border transactions, this stricter compliance environment means new account applications may be rejected without detailed explanation, Personal or corporate accounts may be classified as high risk, Extensive Source of Funds documentation may be required. In some instances, even when documentation is complete, banks may still decline to proceed, as the cost of enhanced compliance review may outweigh the perceived benefit of accepting the client relationship.
Balancing financial security and economic confidence
No one disputes the necessity of combating mule accounts and money laundering. However, the key question is how regulatory frameworks can be structured to prevent “false positives” from undermining investment confidence. Potential policy considerations include establishing transparent appeal mechanisms, defining expiration periods for risk flags, increasing human oversight within AI-driven decision-making processes, such measures could help strike a balance between financial security and maintaining Thailand’s attractiveness to foreign investors.
This client’s experience is not merely about a failed bank account application. It signals a new era in Thailand’s financial system one in which data does not disappear, and risk may accumulate across time. In 2026, financial transactions are no longer assessed solely on their present legality, but also on the historical risk profile recorded by automated systems. In a world where algorithms operate faster than human explanations, the true challenge is not only suppressing grey money but designing a system that remains fair to the innocent.
