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Jakarta Post

Indonesia gears up for digital banks amid legal vacuum

  • Eisya A. Eloksari

    The Jakarta Post

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Jakarta   /   Wed, January 27, 2021   /  07:00 pm
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Illustration of digital bank.(Shutterstock/File)

Indonesia is welcoming a widely anticipated technological disruption in the banking industry in the form of digital banks, despite security concerns and the unavailability of a legal basis for players. The digital bank is a banking business model that provides services and operates mainly through electronic means, with very a minimal need for or a complete absence of brick-and-mortar offices. In a fully digital bank, every banking activity, process and program, including opening a bank account, is conducted online. Several examples of foreign digital banks include South Korea’s mobile-only KakaoBank, as well as Britain’s Monzo. In Indonesia, the eager players to tap into this new form of banking span from traditional banks, including the country’s biggest private lender Bank Central Asia (BCA), to homegrown decacorn Gojek, which plans to collaborate with an upcomi...