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anks are seeking ways to maintain their revenue growth this year as the country'€™s sluggish economy has curbed transactions in various banking channels.

Lower volume of transactions impacts fee-based income, which is part of a bank'€™s source of revenue aside from interest rates, according to Bank Mandiri vice president for e-banking Budi Hartono.

Budi said that he had realized the fact that there existed a lower frequency in electronic channel transactions in a one-month figure between August and September, even though he could not tell exactly whether it was due to a sluggish economy or seasonal factors related to the end of the Idul Fitri holidays.

'€œPerhaps, it was a mixed result between both factors. In terms of amount, it is still growing year-on-year because the number of customers has increased,'€ Budi said.

Bank Indonesia (BI), which oversees a payment system, has yet to release its September data for the country'€™s transactions in real-time gross settlement (RTGS), but a lower frequency and amount was recorded in August on a year-on-year (yoy) basis.

The data show that total volume of the country'€™s RTGS, which captures all real-time electronic payments, stood at 259,590 in the fourth week of August, lower than the 391,140 recorded in the same period of last year.

The total amount transacted through the RTGS system reached Rp 2.23 quadrillion (US$151.3 billion) in the fourth week of August, a slight decline from the Rp 2.28 quadrillion recorded in the same period of last year.

According to Budi, people were triggered to spend less today than in previous years due to weaker purchasing power and the impact of slow government expenditure.

'€œWhen the payment system gets affected, the movement of money becomes slower. For instance, people who previously used their credit cards five times a month might reduce the usage to only once,'€ Budi said.

Despite the weak economy, Mandiri still saw the fee income it generated from e-channel transactions rise 35.3 percent to Rp 664.3 billion in the second quarter, an increase from Rp 490.3 billion in the same period of last year.

The increase contributed to a total fee-based income of Rp 4.15 trillion in the second quarter, an increase of 10.9 percent yoy from Rp 3.74 trillion in the same period of last year.

As for the whole of the banking industry, lenders'€™ operating incomes generated from fees and other gains reached Rp 33.41 trillion in July, higher than Rp 31.46 trillion recorded in the same month last year, according to the Financial Services Authority'€™s (OJK) latest banking statistics.

However, the fee income growth was not capable of boosting their net profits, which fell by 10.4 percent to Rp 59.06 trillion in July, from Rp 65.95 trillion in the same month last year.

OJK deputy commissioner for banking supervision Irwan Lubis said recently that lenders should mobilize their efforts in various electronic banking products and services to increase their fee-based income as revenue from interest rates grew slower due to weak loan growth.

Bank Central Asia (BCA) director Armand Wahyudi Hartono acknowledged that current economic conditions had triggered slower growth in transactions, while saying that '€œit is not worrying and it is still a normal business cycle.'€

Armand said the bank was trying to maintain its fee-based income growth at around 8 to 10 percent this year. To do so, the bank would offer innovative features in its existing e-channel products and introduce a new electronic money-based smartphone app, called Sakuku (my pocket).

'€œThe increase in e-channel transactions is not merely caused by a better economy, but also due to innovative features that will make people more comfortable in using electronic payments,'€ Armand said.

In an effort to grab at opportunities, BCA retail and commercial banking director Suwignyo Budiman said the bank was prepared to start later this year its new cash management service with an '€œintegrated business system'€ for corporate customers.

'€œWe developed the system last year and we are trying to provide adjusted payment solutions for each company because they have different needs,'€ Suwignyo said.

On the retail side, Bank Negara Indonesia (BNI) head of channel management division Adi '€œSusi'€ Sulistyowati said the lender was planning to empower its branchless banking agents, expected to reach 3,000 across the country this year, to support some of its existing cash management services.

The OJK'€™s branchless banking program, dubbed Laku Pandai, promotes banking and financial services for all through the help of other parties, such as individual and institutional agents, supported by cell phones and IT facilities.