S

tate-owned lender Bank Tabungan Negara (BTN) expects its third-party funds to grow above industry average this year through improvements in its digital banking services.

The bank, which is the country'€™s largest mortgage lender, launched an enhanced digital banking service on Tuesday during its 66th anniversary commemoration.

The newly launched initiative takes the form of a '€œdigital lounge'€ concept, in which the bank offers various electronic banking services through digital centers established in dozens of branches and shopping centers to ease customers'€™ banking experience.

BTN retail funding and distribution director Sis Apik Wijayanto said the bank planned to establish a total of 70 digital lounges at 65 branch offices and shopping centers across the country this year, hoping to attract customers.

'€œThe lounges provide faster and more comfortable banking services and digital features to attract customers, including account opening and credit referrals. People wishing to apply for a BTN mortgage can also come to the lounges,'€ Sis added.

Many local banks have set up digital banking outlets to help consumers who often have to wait in long lines simply to meet with tellers or customer relations officers for routine banking transactions.

Sis said BTN had invested relatively small funds, or below Rp 100 billion (US$7.3 million), to launch the initiative as it only needed to integrate its IT system with the help of telecommunications operator Telkomsel.

BTN president director Maryono said the improvement in digital banking services was part of the bank'€™s business transformation program this year in order to adapt to tighter competition at the domestic and regional level.

'€œBTN decided to enter into digital banking transformation as we managed to increase our ranking to become the country'€™s seventh-largest bank as of last year, from number nine previously,'€ he said.

Apart from increasing efficiency, an enhanced digital banking system will help the bank to grow its third-party funds by around 19 percent to 20 percent this year, with a larger proportion of low-cost funding from retail transactions.

As of Dec. 31 last year, BTN had Rp 128 trillion in third-party funds, an increase of 19.97 percent from the Rp 106.4 trillion (US$7.8 billion) booked in 2014. Nearly half of its third-party funds in 2015 comprised current and savings accounts (CASA), which are considered low cost.

Sis said the bank expected that it could increase its CASA portion to 51 percent this year with the help of its improved digital banking system as well as an increase in the number of institutional customers, including state and private-owned companies.

BTN director Irman A. Zahiruddin said previously that the bank would optimize its marketing forces and revitalize at least 3,000 outlets this year in a bid to boost third-party funds.

Maryono said the bank also expected that the improved digital banking service would help its fee-based income grow by at least 22 percent this year, which could in turn increase profits. '€œWe hope that we can boost our profits by 40 percent this year,'€ he said.

BTN saw its net profits jump by 62 percent to Rp 1.85 trillion last year, from Rp 1.14 trillion in 2014, as a result of increases in lending and income from asset recovery.

The net profit growth in 2015 was far higher than the year-on-year net profit result in 2014, which fell by 28.6 percent from Rp 1.56 trillion in 2013.