Digital Bank Daily Social 2022-1

The Rise
of Digital
Banking in
Indonesia
© Dec 2021
dsinnovate.com dailysocial.id 1.
Contents
Content 1 03. Case study 21
01. Definition and Concept 2 #1 Bank Jago 22
Definition of Digital Banking 3 #2 Neobank 27
Why digital banking? 4 #3 blu 30
Digital Transforming benfit of banks 5 04. Bank as a services (BaaS) 32
Concept of Digital banking 6 The concept of BaaS 33
Market size 7 BaaS providers 34
The future of digital banking 8 Benefit of BaaS 35
02. Digital banking in Indoneisa 9 Popular BaaS products 36
A huge potential 10 BaaS scenario: E-commerce 37
Potential adoption variable 11 Case Study: Tokopedia 38
Digital banking regulation 12 05. User experiences 40
List of players 13 Registration 41
Digital banking approach 14 Verification 42
Business models 15 Defining Financial Goal 43
Proposition mapping 16 Card Delivery 44
Unique features 17 Conclusion 45
Company Asset 18
Growth statistics 19
Penetration strategy 20
01.
Definition
and Concept
Definition
of Digital Operations:
Depends on branch office;
Banking
Traditional
banking people operation
era
Tools: ATM
An end-to-end fully
digital bank products Operations:
and/or services. Improve Internet Branch for administrative needs;
technology capabilities banking transactions through apps
of internet and mobile era
banking with eKYC, artificial Tools: Website, Apps
intelligence, new features,
and new business models.
Its value proposition

can be run standalone Operations:
Digital Branchless, paperless,
and integrated with the banking
consumer app. fully online
era
Tools: Apps, BaaS
Why digital
banking
Consumer Behavior
? Consumers who interacted with their bank
through a mobile app or website at least
once a week.
32%
Digital service adoption continues to increase
in 2018
significantly. Now the country has 202.6
million internet users and 98.2% smartphone
penetration. And shaping the new generation to
be a digital native.
50%
in 2020
Alternative Financial Service
Banking customers are now expecting more
digitized products and services with personalized
approach. The financial literacy index has How would consumer prefer to open a new
increased year-on-year, as per 2019 according to bank account?
the OJK survey it has reached 38.03%.
Wider Access 47%

According to Bain & Company, 92 million people Face-to-face
of productive age in Indonesia are still unbanked.
Banking services need to penetrate deeper, 47%
including in tier 2, 3, and 4 cities. Mobile apps
or website
New Normal
Physical restrictions during the pandemic present 37%
a new trend for branchless services. In addition, Desktop or
Laptop
digitalization is accelerating rapidly in this region.
Source: Accenture
Digital Transforming
Benefit for Banks
Value from operations
Companies created this value by developing
modular components, automating processes,
and becoming more open and agile.
Value from customers Value from Value from

Increase revenue from customers via cross- operations customers
selling and new offerings, plus more customer
stickiness. Offering more choices and expanding
knowledge of customers were important drivers
for creating value from customers.
Value from ecosystems
Companies create the most value from
ecosystems when they leverage partnering to Value from
offer go-to destinations, which drive reach and ecosystems
range and help retain innovation. Companies
with an ecosystem business model create more
value from ecosystems than companies without
that type of business model
Source: MIT, Center for Information Systems Research

Concept Core Business Market

Experience
Approach License Actor Initiative
of Digital
Banking Defensive Holding’s full
license
Incumbent Betabanks
Banking First Practiced

Neobanks
Digital
Native Collaborative Not licensed, Startup Challengers
Banks uses partner Bank
licensed to
operate
Big techs Big Techs’ Bank
Non-Banking Newcomer Retailers’ Bank
Each digital banking First
company can have a different
business approach. That will Challenger Licensed Retailer
or partially
generate a unique service licensed
initiative. Current conditions (aims at
obtaining full-
in Indonesia, digital bank license)
services come from several
entities: (1) incumbent
players; (2) subsidiaries;
(3) digitally transformed
old companies; (4) new
companies.
Source: New Banks in the 4th Industrial Revolution: A Review & Typology
Market Size
The global market for digital Digital Banking in 2020
banking estimated at $12.1 billion
in 2020. It’s projected to reach a
revised size of $30.1 billion by 2026,
$12.1 billion
growing at a CAGR of 15.7% over in 2026 CAGR
the analysis period. Digital Banking
Retail Banking is projected to grow

at a 14.3% CAGR to reach $14.3 $30.1 billion 15.7% +
billion by the end of the

analysis period.
After a thorough analysis of Retail Banking CAGR
$14.3 billion 14.3%

the business implications of
the pandemic and its induced +
economic crisis, growth in the
Corporate Banking segment is
readjusted to a revised 18.4%
CAGR for the next 7-year period.
This segment currently accounts CAGR
Corporate in next 7 year
for a 34.8% share of the global
digital banking market. Banking 18.4% period
Source: Global Industry Analysts Inc.

“
The Future of Digital Banking
“Digital bank comes with more accurate

• E-commerce • E-comemrce • Job search risk management. The success rate of
Non-financial
• Assisted
• Educational • Forex services platform e-commerce
services
platform • Booking facillities • Skill • Booking facillities

bank loans has increased assisted by
for travel (hotels, enhancement for travel (trains big data analysis, machine learning,
flights, and trains) platform and buses)
and artificial intelligence.
Credit analysis no longer only uses
OJK’s history and SLIK. More real-time
• Money transfer • Money transfer • Money transfer • Money transfer
(UPI) and mobile (UPI), mobile (DMT and (DMT and AePS) base. In addition, credit distribution can
financial services
recharges recharges, AePS) and bill bill payments and be considered on transaction ratings on
Non-banking
• Personal finance bill payments payments recharges

management (BBPS) e-commerce platforms, food delivery,
• personal ride-hailing, and other consumer
finance
management apps. It will significantly help MSMEs in
Indonesia to access financial services.”
Bhima Yudhistira,
• Prepaid card • Savings account • Saving account • Savings account Director Center of
Banking services
services • Credit • Credit on tap • Credit Economic and Law

• Sachet loans • Investment • Sachet • Micro investments Studies
• Insurance insurance
Teenagers Digital Blue/grey-collar Gig economy

millenials workers workers/freelancers
Source: CELIOS, PWC
02.
Digital
Banking in
Indonesia
Total Deposit Accounts (in units)

A Huge Potential
351.710.396
The financial industry is getting a peak
315.449.168
growth moment. According to the OJK,
the financial inclusion index in Indonesia
reached 76.19% in 2019. 255.455.237 289.038.586
211.827.900
The adoption of banking products has
consistently increased from year to
year. As of 2020, there are 351.7 million
registered accounts in 110 banks (96 2016 2017 2018 2019 2020
conventional banks, 14 sharia banks).
The fintech business model is well Nominal Deposit (in trillion rupiah)
received as an alternative to banking 6.861
services with a simpler mechanism
through a digital approach. 6.196
5.810
5.460
Based on Google, Temasek, and Bain 4.985
report, Indonesia’s digital economic is
expected to grow from $44 billion in 2020
to $124 billion in 2025. It’s being the most
valuable internet economy in the region.
2016 2017 2018 2019 2020
Source: Lembaga Penjamin Simpanan, 2020

Potential Propensity to use digital banking in the next 6 months
Adoption
% of nondigital respondents having access to digital banking
Likely to use in next Unlikely to use in next 6 months

Variable 6 months (10% of respondents)
• Diversifying banking China

relationships
India
• High level of openness to
digital banking propositions
Indonesia*
• Digitally active consumers are
more valuable
Philippines
• High internet and smartphone
penetration Vietnam
• High unbanked and

underbanked population Thailand
• Growth of digital and financial

literacy Malaysia
• Supporting regulation to Myanmar

accelerate the industry
*N for Indonesia: 339 respondents

Source: McKinsey&Company, 2019
Digital Banking Digital Bank Criteria

Regulation
POJK No.12 & No.13/POJK.03/2021: the
regulations are reformulating banking
and its products and services in Innovative business model using technology
general, including defining a digital
bank; a bank with digitized products Have an ability to manage a prudent and
and services.
sustainable business
• Digital bank could be in branchless form
(excluding HQ) or limited branches.
Have adequate risk management
• OJK did not classify a form of digital bank
in Indonesia. It could be existing players
with digital services, digital transformed Fulfill the governance aspects
banks or fully digital banks.
• Capital requirement for the new fully Protect customer data security
digital bank will be Rp10 trillion, similar to
conventional bank. For convert and digital
units, no specific capital requirement. Contribute to the digital financial inclusion
List of Players
Planning Preparing Launched
Digital Banking Approach

Based on the business structure, the digital banking approach is classified into three types:
1. New Products. The parent company initiates digital bank products as an alternative service
2. New Units. The parent company develop a new subsidiary focused on providing digital banking services
3. New Ventures. A fresh company designed as a digital bank
New product New business New ventures

Business Models
Example Players:
Innovative Provide personalized financial

Product services to the needs of today’s
users.
Integrate with consumer apps as a

Ecosystem financial support system for the
Integration user base.
Focus on serving underbanked

Undeserved & communities in tier 2, 3, and 4 cities;
MSME Focused and SMEs.
Empower digital app developers with

Bank as a financial system infrastructure and
Services capabilities.
Wholesale
Proposition
Mapping
Unbanked/MSME Retail
Lifestyle
Unique Features
Our researcher tried several digital bank apps that were already fully released on Google Play to find the unique
feature offered.
App Version Unique Features
Blu (versi 1.8.0) • bluGether: plan finances with other users (3% interest per annum)
• bluDeposit: open a time deposit service min. IDR 1 million (4% interest per year)
• Withdraw cash from the application via the nearest BCA ATM
Jago (versi 5.7.0) • Pockets: separate savings according to use or financial goals to be achieved
• Send & Pay: send a payment request and/or split-bill
• Connected to Gojek and Bibit
Jenius (versi 3.1.0) • Save It: a savings feature with various specifications for certain financial goals
• Moneytory: for financial reporting and analysis services
• Charge Money: send a payment request and/or split-bill
LINE Bank (versi 1.1.5) • Time Deposit: short term deposit service min. IDR 1 million
• Unique debit card with LINE sticker character
Motion Banking (versi 2.1.3) Management of Deposit, KTA, KPR services through the app
TMRW ID (versi 4.1) City of TMRW: gamification features for saving, with unique visualizations and
concepts
SeaBank (versi 2.7.0) • Savings with relatively high interest, in the range of 7% per year
• Connected to Shopee
Company Asset
Company Period Asset
PT Bank Jago Tbk (Jago) September 2021 Rp10.9 trillion
PT Bank Digital BCA (blu) September 2021 Rp4.8 trillion
PT Bank DBS Indonesia (Digibank) August 2021 Rp88.1 trillion
PT Bank BTPN Tbk (Jenius) September 2021 Rp183 trillion
PT Bank KEB Hana Indonesia (LINE Bank) August 2021 Rp43 trillion
PT Bank MNC Internasional Tbk (MotionBanking) September 2021 Rp13.5 trillion
PT Bank Neo Commerce Tbk (Neobank) August 2021 Rp7.5 trillion
PT Bank Mandiri (Persero) Tbk (New Livin’) August 2021 Rp1,258.5 trillion
PT Bank OCBC NISP Tbk (Nyala) August 2021 Rp202.8 trillion
PT Bank Seabank Indonesia (SeaBank) March 2021 Rp3.5 trillion
PT Bank UOB Indonesia (TMRW) August 2021 Rp119.5 trillion
PT Bank Bukopin Tbk (Wokee) June 2021 Rp77.1 trillion

Neobank has an impressive download

performance during August – September 2021
Growth Statistics
Neobank
9,384
10,000
The performance of digital bank at the Google 7,985
Play in October 2021. The rank is based on the 8,000
top 100 applications in the financial category.
6,000
Rank Digital Bank Total Download 2,971

4,000
#1 10M+ 2,000 2 148
0
#3 500K+
May June July August September
Blu Seabank Motion Banking Jago

#11 500K+
1250
1,071
#27 1M+
1000
709
#52 5M+ 750
500 454
#59 500K+
241
250 194
77 81 47 99
#74 100K+ 14 15 41 56
0
May June July August September
Source: AppBrain, Sucor Research
Penetration Operating expense by type (as of Aug-21)
Strategy
Personnel Promotion Others
500
450
400
• Almost all digital bank players reported an 350
increase in operating expenses in the last few 300
months, especially starting June 2021. This 250
indicates their efforts to be competitive. 150
100
50
• Neobank burns the highest operating expense.
And it impacts on new user penetration and Jago neo+ Blu SeaBank Motion Banking
downloads to the app.
Monthly opex trend
• The strategy adopted is similar to the Jago neo+ Blu SeaBank Motion Banking
approach of digital startups that have
reached the point of success in terms of 160
service penetration. 140
120
100
• This will put further pressure on the
profitability of the digital bank peers in 80
coming months. But, note that regional digital 60
banks typically start to breakeven in its 40
second or third year of operation.
20
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21

03.
Case Study
#1 Bank Jago: Journey

Ownership of
11.868
September
PT Bank Artos Indonesia was Bank Jago inaugurated
2021
1992
established in Bandung the sharia unit
IPO through the Indonesia Bank Jago establishes a 21.404

July 2021
2016
Stock Exchange with issuer partnership with Gojek

code “ARTO” and Bibit 29.806
PT Metamorfosis Ekosistem
April 2021
Indonesia and Wealth Track PT Bank Jago Tbk launched

2019
Technology Limited acquired the Jago application

9.116
50% shares.
PT Metamorfosis Ekosistem Indonesia

Wealth Track Technology Limited
March 2021
April 2020
Conducted Rights Issue I.

GIC Private Limited PT Dompet Karya Nak Bangsa Limited
Increase core capital to
becomes an investor
Rp1.3 trillion GIC Private Limited
Ribbit Capital’s ownership is not more than 5%.
Gojek through PT Dompet

March 2021
December
Conducted Rights Issue II.

October
Karya Anak Bangsa (GoPay) Ribbit Capital

2020
2021
becomes a strategic investor Increase core capital to IDR

8.11 trillion becomes an investor
with 22.16% ownership
#1 Bank Jago: App Performance

• In its first year of operation,
Bank Jago continued to
experience an increasing
trend of adoption. It’s driven by
continuous product expansion,
including integration with
strategic partners.
• In-app gimmick feature

also added to increase
user retention. The latest
is “Fintamin Games”, it’s a
challenge-based gamification
game to encourage the use of Monthly active usage trend d
uring April-September 2021
Bank Jago services. 1,000
• In addition to marketing 792

800
through digital channels, they
also open an affiliate program 600
through an application to
encourage the user base 400
to invite their relatives to
download and register for Bank 200
Jago services.
April May June July August September

#1 Bank Jago: Business Performance

Bank Jago collaborates with fintech lending
Credit Growth in Q3-2021 through a channeling scheme or as an
institutional lender. Some of them:
4,000 3,727
3,000
“
2,171
2,000
1,292
908
1,000 619
“This achievement confirms that our

0 business model is right. The implementation
Sept 2020 Dec 2020 Mar 2021 Jun 2021 Sept 2021 of the concept of collaboration with the
digital ecosystem in serving customers
has proven to make us grow inorganically,
effectively and quickly,”
502% 311% 71,67%
YOY YtD Q to Q
Kharim Siregar,
Bank Jago’s
President Director
#1 Bank Jago: Ecosystem

Travel sites Saving & Investment
Ecosystem partner (Savings, deposits, mutual funds,
fixed income, etc)
Entertainment Payment
Open Api
E-commerce
retailers
(Omnichannel) Lending
Aman Syariah
Management
Transportation
Insurance
(Life, property, health,
travel, etc)
Personal
F&B Finance
#1 Bank Jago: Integration
Now, user can pay for Gojek services, from

GoFood, GoCar, GoRide, to GoTagihan with Jago.
Some of benefit offered:
Better at Managing Free from Checking

Expenses Top Up Expenses
#2 Neobank: Journey Ownership of
6,122
Transformed into
a digital bank and 16,532
changed its name to PT
2021
11,099
PT Bank Yudha Bakti was Bank Neo Commerce.
1990
established. Enter the “Bank BUKU II”

category
Survived the crisis

1998
and entered the “A”

Akulaku becomes the 24,981
2019
classification
new shareholder
Yellow Brock Enterprise Ltd

Expanded branch offices Rockcore Financial technology Co. Ltd
2001
in Java and Sumatra PT Akulaku Silvrr Indonesia

IPO on the Indonesia
2015
Stock Exchange PT Gozco Capital

#2 Neobank: Business Performance

Monthly active usage trend d
uring May-September 2021
Based on the company
release, after getting 3,000 2,677
the “Digital Customer 2,323
Onboarding” 2,000 1,432

license and feature 1,177
development, Neobank 1,000
experienced an
98
increase in the number
of customers by more May June July August September
than 730,000 on 3-10
September 2021. 2.250,00 IDR
Previously, in the 27 +1,996.98 (789.26%) past 5 years
August – 2 September 2,500
2021 period, customers 2,000
only increased by 1,500
around 350 thousand. 1000
500
The stock market
0
response also increased 2018 2019 2020 2021
dramatically after they
transformed into a Open 2,310.00 Mkt cap 21.03T 52-wk high 2,440.00
digital bank. High 2,380.00 P/E ratio - 52-wk low 238.69
Low 2,240.00 Div yield 0,0091%

#2 Neobank: Features
• Neobank focuses on basic banking

services in its app, packaged with a
more flexible approach for individual
and business users
• For individual users, Neobank

provides short-term and long-
term savings products. The app is
designed to make it easier for users
to flexibly manage their money.
Several types of savings are also
offered, such as regular savings,
pension funds, and education.
• For business users, Neobank offers

current accounts, time deposits, and
deposits on call.
#3 Blu: Journey
Ownership of
PT Bank Rakjat Inaugurated a collaboration
October
with Telkomsel to include
2021
1965
Parahyangan was
inaugurated as a bank the blu application in the
redi ecosystem
0,01
Changed its name to

July 2021
1982
PT Bank Pasar Parkyat E-commerce as exclusive

Parahyangan partner of blu app
June 2021
The official blu app is

Rebanded to PT Bank 99,99
1990
launched to the public

Royal Indonesia
Partnering with Blibli
Officially acquired by PT Finally returned as PT

2020
2019
Bank Central Asia Tbk Bank Digital BCA.

PT Bank Central Asia Tbk
PT BCA Finance
Digital Banking and Its Integration Strategy
Based on the features and After completing the initial

business model, digital banks penetration phase, we see the
in Indonesia have the future next trend is to establish open
objective to create a digital banking capabilities. The goal
service ecosystem. Their role is to enable digital apps to
is to be a payment gateway embed their financial services
and a hub for supporting as an added value.
financial services. Some have
done initial testing, such as
Bank Jago on Gojek, Sea Bank
on Shopee, and Blu on Blibli
04.
Bank as a
Services
(BaaS)
The Concept of BaaS

• BaaS is an end-to-end
model that allows digital 1.
banks and other third
Fintech pays
parties to connect with fee to access
banks’ systems directly BaaS platform
via APIs.
• Many non-financial
services industries have
digitized their business
models and distribution
channels to serve
customers at a very low
cost. With BaaS, they can
2.
easily embed financial Financial
institution acting
3.
products as part of their
as BaaS provider Fintech uses
digital platforms e.g. opens APis to APIs to build new
taking out a loan when fintech financial services
you are checking out of an solutions
e-commerce store.
“
BaaS “The traditional banking model is based on expensive legacy
technology and operations. The cost of acquiring a customer
Providers is typically in the range of $100 to $200. With a new, greenfield
BaaS technology stack, the cost can range between $5 and
$35,” according to Oliver Wyman analysis
Some of player that provide

BaaS services: 5,750 Platform providers
5,733 — Shopify
463 — Paypal
Nonbank/Digital Bank 333 — Tencent
Embedding the platform 220 — Visa
300 181 — Ping An
Financial Institutions 250

Opening services through the
Traditional financial
Application Programming 200 institutions (Fis):
Interface (API)
150 126 — DBS
117 — Bank of America
Fintechs 100 191 — Allianz
Bridging the financial
73 — HSBC
institution with the business 50
by developing and offering the 54 — Barclays
financial product 0
2016 2017 2018 2019 2020

Benefit of BaaS
Financial Institutions Digital Platforms End Customer

• Increased sources of • Efficient development • Better UX for payment/
revenue (this sector fully loan/etc
• Cusomer acquisition regulated) • Single apps –
strategy • Embedded financial integrated services
• Cost-saving initiative product • Innovative product/
• Getting more consumer • More customer bases services
insight • Scalable
• Expanding the services
and ecosystem
Popular BaaS Products
Online Banking Offer Loans Offer Debit and Credit Cards

Offers basic online Provides loan products Enables digital platforms
banking products for individuals and to offer co-branded credit/
and services, such as MSMEs debit card products
savings, payments,
transfers, and more
Investment Services Verify Customer Identification

Provides investment capabilities Provides identity
and products from banking verification, eKYC, and
such as deposits credit scoring services
BaaS Scenario: E-commerce
E-commerce
“
“The digital platform will
facilitate synergies with other
digital financial services, such
as investment and insurance
services. However, it should be
noted that the biggest cost and
BaaS risk of the digital transition is the
Financial
Services failure to maintain market share
(Frontend)
Bank and segments. These factors
Middleware can make the bank irrelevant.”
Poltak Hotradero,
Indonesian Stock
Exchange Business
Financial Services/ Development Advisor
License Product
Product API
(Backend)
(Frontend)
Case Study: Tokopedia
Payment E-money As a technology company

with the biggest marketplace
Paylater
platform in Indonesia,
Bank Transfer Tokopedia provides financial
Digital Bank services for customers
and merchants through
Others partnerships with various
partners through BaaS and
BaaS and API mechanisms. It allows the
Lending Productive company to form a relevant
3rd Party
Consumtive APIs product ecosystem and
innovate agilely following
customers’ demands.
Investment Gold
Mutual fund
Donation
Others
Platform Marketplace
Credit Scoring
Case Study: Toko Score Tokopedia Score
Credit
Digital footprints on e-commerce Scoring
platforms are also being leveraged
to assist banks in assessing users’
feasibility to access financial services. OCR
Semangat Digital Bangsa (SDB), an Recognition Platform
innovative credit scoring (ICS) service Identity

card
provider affiliated with Tokopedia, Verification
launched Toko Score to provide credit
scores from prospective borrowers to
strategic partners, in this case, financial Customer Fill the Upload the NPWP
service institutions. It analysis the Sign-up form requirement
Take a selfie
risk profile of prospective borrowers with identity
based on the activities and transaction card
behavior of prospective borrowers on
the e-commerce platform, Tokopedia, Other
by prioritizing the principles of security
and protection of personal data based Not accepted Verification
on applicable regulations.
Toko Score enables the assessment

profile to be seamless while allowing
Accepted
banks to penetrate to wider segments
that may not be covered by the current
underwriting process. Hence, help
accelerate credit financial inclusion in Customer Agreement
on-boarding
the country.
Digital Signature
“
“Collaboration with strategic partners,
including marketplace like Tokopedia, can
play a significant role in expanding the
reach of digital banks. Through Tokopedia,
for example, users can easily compare
and choose financial services provided by
bank and non-bank financial institutions.
With technology, we have also simplified
the process for bank account opening or Vira Widiyasari,
loan requests by adopting a seamless and Fintech & Payments Business
faster user journey. In addition, the account Head of Tokopedia
opening process has included top-up and
transfer services, enabling users to instantly
shop on our platform or make other financial
transactions whenever they want.”
User
Experiences
Researchers conducted experiments on several digital bank applications that have

been officially launched. We note that there are 4 phases that prospective customers
will encounter when on-boarding for digital bank service. In general, the flow is the
same, although there are some specific differences on the execution side of each bank.
Defining Card
Registration Verification
Financial Goal Delivery
Registration
After downloading the app, in the initial registration
process the user will find several processes like this:
01 Create an account 02 Fill in the personal data form
03 Verify phone number and email

Verification
04 Upload identity documents;

some apps require the user to
take the photo directly through
the app
Verify identity through video

05 calls with officers
One of the important innovations of digital banking

services is in this phase. They allow the verification
process to be done completely digitally. Assisted by
technologies such as artificial intelligence, machine
learning, and computer vision; the platform enables
fast and efficient verification tasks. Previously, this
process had to be done manually by officers directly
at the branch office.
Defining Financial Goal

Digital banking services also have ambitions to
become a personalized application for every user.
At the registration stage, they will ask the purpose of
opening an account. Usually the options include the
following objectives:
• Savings
• Investments
• Business
• Others
The highlighted features in the application will be

tailored to the financial goals that the user wants
to achieve. For example, if someone chooses an
investment option, services such as deposits or
mutual funds will always appear on the home page.
Card Delivery
• Most digital bank applications still provide debit
card facilities. Users can also register for a credit
cards—administration and analysis processes will
also be done digitally.
• blu is one of the digital banks that does not

provide card facilities. It relies on the cardless cash
withdrawal feature on the Bank BCA network.
• The use of debit cards is still significant in the

local market. Because the cashless ecosystem
[including infrastructures, consumer behavior]
is still in the development stage. Debit cards
are a tool for getting cash and even payments
at merchants.
Conclusion
Conclusion
A digital bank as a branchless Based on the achieved Use case integration
financial institution has traction, several digital bank will be a new chapter
a great opportunity to applications that have been in the digital banking
increase the penetration of a launched have received ecosystem. The concept
bankable society in Indonesia. quite good acceptance in the of Bank as a Service or
The approach of modern community. Moreover, some embedded finance will
digital applications allows players are starting to integrate be relevant as one of the
them to blend in amidst the with consumer applications with main business models.
acceleration of digital services large users.
on various sides.
DS/innovate is a Jakarta-based innovation
consultant and research firm.
We help companies and enterprises

connect to Indonesia’s startup ecosystem
through advisory, research, hackathons
and incubators/accelerator programs.
Engage with our team to discuss how
innovation ecosystem can benefit your
company both short and long term.
Contact us to know more:

bizdev@dailysocial.id
dsinnovate.com and dailysocial.id

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The Rise

Its value proposition

Wider Access 47%

Value from customers Value from Value from

Source: MIT, Center for Information Systems Research

Concept Core Business Market

Banking First Practiced

Retail Banking is projected to grow

billion by the end of the

After a thorough analysis of Retail Banking CAGR

$14.3 billion 14.3%

Source: Global Industry Analysts Inc.

“Digital bank comes with more accurate

platform • Booking facillities • Skill • Booking facillities

• Personal finance bill payments payments recharges

services • Credit • Credit on tap • Credit Economic and Law

Teenagers Digital Blue/grey-collar Gig economy

Total Deposit Accounts (in units)

2016 2017 2018 2019 2020

Source: Lembaga Penjamin Simpanan, 2020

Potential Propensity to use digital banking in the next 6 months

Likely to use in next Unlikely to use in next 6 months

• Diversifying banking China

• High unbanked and

• Growth of digital and financial

• Supporting regulation to Myanmar

*N for Indonesia: 339 respondents​

Digital Banking Digital Bank Criteria

Digital Banking Approach​

3. New Ventures. A fresh company designed as a digital bank

New product New business New ventures

Innovative Provide personalized financial

Integrate with consumer apps as a

Focus on serving underbanked

Empower digital app developers with

App Version​ Unique Features

PT Bank Jago Tbk (Jago)​ September 2021​ Rp10.9 trillion​

PT Bank Digital BCA (blu)​ September 2021​ Rp4.8 trillion​

PT Bank DBS Indonesia (Digibank)​ August 2021​ Rp88.1 trillion​

PT Bank BTPN Tbk (Jenius)​ September 2021​ Rp183 trillion​

PT Bank MNC Internasional Tbk (MotionBanking)​ September 2021​ Rp13.5 trillion​

PT Bank Neo Commerce Tbk (Neobank)​ August 2021​ Rp7.5 trillion​

PT Bank OCBC NISP Tbk (Nyala)​ August 2021​ Rp202.8 trillion​

PT Bank Seabank Indonesia (SeaBank)​ March 2021​ Rp3.5 trillion​

PT Bank UOB Indonesia (TMRW)​ August 2021​ Rp119.5 trillion​

PT Bank Bukopin Tbk (Wokee)​ June 2021​ Rp77.1 trillion​

Neobank has an impressive download

Rank​ Digital Bank Total Download 2,971

#1 10M+​ 2,000 2 148

Blu Seabank Motion Banking Jago

Penetration Operating expense by type (as of Aug-21)

Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21

#1 Bank Jago: Journey​

established in Bandung the sharia unit

IPO through the Indonesia Bank Jago establishes a 21.404

Stock Exchange with issuer partnership with Gojek

Indonesia and Wealth Track PT Bank Jago Tbk launched

Technology Limited acquired the Jago application

PT Metamorfosis Ekosistem Indonesia

Conducted Rights Issue I.

Gojek through PT Dompet

Conducted Rights Issue II.

Karya Anak Bangsa (GoPay) Ribbit Capital

becomes a strategic investor Increase core capital to IDR

*N for Indonesia: 339 respondents

Digital Banking Approach

App Version Unique Features

PT Bank Jago Tbk (Jago) September 2021 Rp10.9 trillion

PT Bank Digital BCA (blu) September 2021 Rp4.8 trillion

PT Bank DBS Indonesia (Digibank) August 2021 Rp88.1 trillion

PT Bank BTPN Tbk (Jenius) September 2021 Rp183 trillion

PT Bank MNC Internasional Tbk (MotionBanking) September 2021 Rp13.5 trillion

PT Bank Neo Commerce Tbk (Neobank) August 2021 Rp7.5 trillion

PT Bank OCBC NISP Tbk (Nyala) August 2021 Rp202.8 trillion

PT Bank Seabank Indonesia (SeaBank) March 2021 Rp3.5 trillion

PT Bank UOB Indonesia (TMRW) August 2021 Rp119.5 trillion

PT Bank Bukopin Tbk (Wokee) June 2021 Rp77.1 trillion

Rank Digital Bank Total Download 2,971

#1 10M+ 2,000 2 148

#1 Bank Jago: Journey

#1 Bank Jago: App Performance

#1 Bank Jago: Business Performance

#1 Bank Jago: Ecosystem

#1 Bank Jago: Integration

Some of benefit offered:

#2 Neobank: Journey Ownership of

#2 Neobank: Business Performance

launched to the public

Digital Banking and Its Integration Strategy

The Concept of BaaS

Financial Institutions Digital Platforms End Customer

Popular BaaS Products

Online Banking Offer Loans Offer Debit and Credit Cards

Investment Services Verify Customer Identification

BaaS Scenario: E-commerce

Case Study: Tokopedia

Payment E-money As a technology company

Defining Financial Goal