Digital Banks Are Forcing Fundamental Change Across Industry: Analysts – Business

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Vincent Fabian Thomas (The Jakarta Post)

PREMIUM

Jakarta ●
Sat, October 2, 2021

Competition between digital banks and conventional banks has intensified and is expected to accelerate the trend of digitization in the sector.

In August, some digital banks were offering interest rates of 7-8% on deposits, well above the 3.5% cap up to which funds are guaranteed by the Deposit Insurance Corporation, reflecting their aggressive strategy to win over customers.

The publicly traded Bank Jago recorded a sevenfold increase in credit lending per year in the first half of this year. The bank plans to further increase its lending through a partnership with peer-to-peer (P2P) lenders and a multi-finance company, among other channels.

Bank Jago, Bank Neo Commerce (BNC), SeaBank and other digital banks suffered net losses ranging from Rs 46.77 billion to Rs 231.85 billion in the first half of this year. Yet the first two saw th …

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