Ramai-ramai Bikin Bank Digital

Summary

Indonesia's digital banking sector is rapidly evolving, with potential driven by its vast geography and growing internet access. The OJK has set regulations for digital branches, but there is still no clear framework for fully digital banks. Local banks like BCA and Bank Jago are leading the way in digital banking, while other banks are exploring the model. Globally, countries like the UK, China, Hong Kong, and Singapore are ahead in the digital banking revolution, with some offering completely digital services and favorable regulations. Despite the challenges, Indonesia's potential for digital banking is immense, with opportunities to address the unbanked population and underserved businesses.

Takeaways

• 😀 The banking sector in Indonesia is undergoing a transformation towards digital banking, with efforts to overcome geographical and infrastructural barriers.
• 😀 The Financial Services Authority (OJK) has issued regulations for digital branches by banks since December 2016, but there are still no specific regulations for fully digital banks in Indonesia.
• 😀 Digital banking services in Indonesia are seen as a solution to overcome geographical challenges and improve access to banking for people in remote areas.
• 😀 Indonesia has a large potential for digital banking, with a population of 92 million adults, but more than half of them lack access to financial services, particularly in rural and isolated areas.
• 😀 The growth of smartphone usage in Indonesia is rapid, with 30-50% annual growth, which could help drive the adoption of digital banking services.
• 😀 Currently, several major banks in Indonesia, like BCA and BRI, are preparing to enter the digital banking space by acquiring smaller banks or transforming subsidiaries into digital entities.
• 😀 BCA has already acquired Royal Bank and rebranded it as BCA Digital Bank, while Bank Artos has also transformed into Bank Jago.
• 😀 In addition to these, other digital banking entities such as BTPN's Genius, Bank Danamon's d'Save, and Bank Permata's Permatami have been launched in Indonesia.
• 😀 Globally, countries like the UK, China, Hong Kong, and Singapore are ahead in the development of digital banks, with companies like Monzo, Revolut, and Webank leading the charge.
• 😀 Indonesia has the potential to be a leader in digital banking due to its large population and rapid internet and smartphone adoption, but it still lags behind countries like Singapore and Hong Kong, who have already issued digital bank licenses.

Q & A

What is the main focus of digital banking transformation in Indonesia?

The main focus is on the development and transformation of digital banking, aiming to overcome geographical challenges and increase financial inclusion across Indonesia's vast archipelago.

What steps has OJK (Financial Services Authority) taken to support digital banking in Indonesia?

OJK has issued regulatory frameworks since December 2016, including guidelines for the establishment of digital branches by banks, outlining requirements such as capital, business plans, and approvals for electronic banking services.

What are the requirements for opening a digital branch according to OJK regulations?

The requirements include submitting a business plan, having adequate core capital, approval for electronic banking implementation, and ensuring compliance with network office regulations.

How does digital banking help solve financial accessibility issues in remote areas of Indonesia?

Digital banking can overcome geographic barriers by offering banking services to areas that are otherwise difficult to reach due to transportation and logistical challenges, providing a solution to banking accessibility.

What is the potential of digital banking in Indonesia according to research?

Indonesia has a large population with rapid smartphone and internet adoption, which offers a huge opportunity for digital banking to provide services to underbanked populations and support the growth of SMEs.

What challenges prevent the full realization of digital banking's potential in Indonesia?

Despite the rapid growth of smartphones and internet coverage, many individuals, especially in remote areas, still lack access to banking services, and the full potential of digital banking has not yet been realized.

What steps have banks in Indonesia taken towards digital banking transformation?

Several banks, including BCA, Bank Jago, and BRI, have acquired or developed digital banking entities and platforms, such as BCA acquiring Bank Royal and transforming it into BCA Digital Bank.

How is digital banking evolving in other countries around the world?

Countries like the UK, China, Hong Kong, and Singapore have already established or are in the process of establishing digital banks, with some providing licenses to fintech companies, offering services with minimal physical infrastructure.

What makes WeBank in China a unique example of digital banking?

WeBank operates entirely online, controlled by a fintech giant rather than a traditional bank, and offers services like facial recognition for credit scoring without physical branches or property requirements.

What is the significance of Singapore's approach to digital banking?

Singapore is providing licenses for digital banks, focusing on both full-scale digital banks and wholesale banks serving only corporate clients. This is expected to further innovate the financial sector while ensuring local control of the banks.