The Growth of Digital Banks in Indonesia
Is this the future of banking in Indonesia?
A Digital bank is a bank that is connected to an online platform and has a limited physical office. Nevertheless, digital banks can still provide banking services to their customer digitally. This is supported by technological growth, especially in the financial service industry.
The first digital bank in Indonesia is Jenius, the digital bank from BTPN which was established in 2016. The population of digital banks is increasing rapidly. Indonesia occupies the country with the second-largest number of digital bank account holders in the world (Based on Finder.com research). Currently, the variety of digital bank choices is increasing in Indonesia.
Basically, a digital bank is a bank institution that utilizes technology to provide convenience to their customer. We no longer need to go to the nearest bank branch to obtain banking services such as opening an account, buying investment products, etc. Everything can be done anywhere and anytime through an online platform.
COVID-19 has participated in pushing the transition from conventional banks to digital banks faster because previously some bank services had to be done by coming to bank branches, while from the digital banks it can be done through an online platform. It’s proven although all can be done online, the enthusiasm of Indonesian people for digital banks is very high. Apart from being one of the efforts to break the chain of COVID-19 spread by doing face-to-face bank activity, it turns out that people are easier and more comfortable doing their banking activities through online platforms.
Digital banks are complementary to support the digital financial ecosystem. The presence of digital banks will increase digital financial inclusion in Indonesia. Digital banks have a bright future prospect since the millennial generation and Gen Z has entered the productive age stage who is the target market of digital banks. The Millennial and gen Z are also technology literate generations so digital banking solutions can be easily accepted.
We as a PIP (Penyelenggara Infrastruktur Pembayaran) already holds license from Bank Indonesia. ALTO Network has also partnered with some of the digital banks in Indonesia such as Blu (BCA Digital), Jenius (BTPN), Jago, Seabank, Bank Neo Commerce, Ajaib, etc. As infrastructure support, we believe that we no longer need to start everything from the scratch, but by collaborating with the strategic partnership we can grow much bigger and faster together. ALTO Network no longer acts as a switching company for the conventional banks, but together with digital banks, ALTO Network is also ready to be a supporter of digital innovation solutions.
