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Internet banking remains unpopular among Indonesians: Survey

Although the number of Internet users has increased significantly during recent years, Internet banking has not yet become popular among Indonesian bank customers, a survey shows

The Jakarta Post
Jakarta
Sat, May 26, 2012

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Internet banking remains unpopular among Indonesians: Survey

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lthough the number of Internet users has increased significantly during recent years, Internet banking has not yet become popular among Indonesian bank customers, a survey shows.

According to a survey conducted by Nielsen last year, only seven percent of Internet users said they had used the Internet for banking transactions.

“Internet banking is growing rapidly outside Indonesia, but apparently it hasn’t been a popular move here,” said Nielsen Indonesia director Dena Firmayuansyah.

Dena said that Internet banking mostly offered the ability to carry out basic tasks such as checking account balances, making individual bill payments to another account, transferring funds between accounts and purchasing cell phone credits.

He said that many bank customers had in fact registered with their bank’s Internet banking services, but many of them did not use the service due to several reasons, such as complicated processes and a lack of trust in the security of the transactions.

The survey showed that 49 percent of bank customers surveyed said they were interested in using Internet banking, with the highest levels of interest concentrated in Surabaya, East Java.

However, the survey also noted that the proportion of those wary of Internet banking was also quite high among bank customers.

Around 32 percent of bank customers surveyed in Jakarta were reluctant to use Internet banking for negative reasons such as complicated menus (54 percent), complicated registration (22 percent), and less security (10 percent).

For Nazianda Aurora, a wedding organizer based in Jakarta, even though Internet banking could ease transactions, she rarely used it because the layout of the website was not user-friendly and the token (a device used to distribute security codes when doing online transactions) made it impractical.

“I log in to Internet banking activities only once in a while, mostly when I want to purchase credit for my cell phone. I rarely use it for transferring money because the website confuses me. Moreover, most of the time I can’t remember where I put my token,” she said.

For Inditian Latifah, an assistant lecturer at the University of Indonesia, Internet banking helped her to book a flight, but she did not have any plans to use it for other purposes such as paying bills or transferring funds.

“For other transactions I opt to go to the bank or ATM, it’s still much easier than logging in to the website,” she said. Many other customers said that they did not use the Internet banking facilities due to security reasons.

State-owned Bank Mandiri, the largest Indonesian bank in terms of assets, has offered Internet banking since 2001. It recorded 1.25 million Internet banking users as of April 2012, up 43 percent from the same period last year.

“We saw a big opportunity in Internet banking, but not all of our customers are Internet savvy. Therefore, we are boosting our promotion by offering cash back for people who complete transactions via the Internet,” said Bank Mandiri senior vice president Rico Ustavia in a phone interview on Friday.

Dena commented that most people’s hesitation to use Internet banking was also due to a lack of trust in the security of the transaction process. Therefore he said that the first barrier that banks had to go through was safety and reliability.

While safety and reliability remain important factors for customers, accessibility (location of banks, number of branches and ATMs) has also become a key factor for costumers when choosing a brand, said Dena.

“Banks need large investments in order to reach the customer’s expectation in terms of accessibility. Therefore they need to be creative in their marketing and branding activities to establish a strong perception with customers,” he said.

“With Internet banking, banks can take advantage of the ‘anytime-anywhere’ nature of these mediums to increase their accessibility,” he added. (nad)

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