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Battle begins between incumbent banks and tech giant-backed digital banks
Digital banking is transforming the traditional financial landscape. There are now 249 digital banking players globally, comprised of daring digital upstarts and transitioning legacy operators, with Indonesia offering a fresh and hugely exciting opportunity for this expanding market.
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Financial Services Authority (OJK) has established a Digital Banking Task Force to study the implementation of digital banking services in Indonesia. (Tempo/Tony Hartawan)
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igital banking is transforming the traditional financial landscape. There are now 249 digital banking players globally, comprised of daring digital upstarts and transitioning legacy operators.
Indonesia offers a fresh and hugely exciting opportunity for this expanding market, with significant unbanked populations and a growing appetite for digital financial service solutions. The impending release of digital banking regulations by the Financial Services Authority (OJK) could dictate the true value of this opportunity and define how fertile the ground is for digital banking in Indonesia.
Digital transformation in banking is not new. Internet banking triggered a similar transition. What sets this shift apart is its remarkable acceleration, driven by the expectations of customers used to the services of technology brands such as Shopee, OVO and Gojek and Tokopedia’s newly formed GoTo Group.
This market is the focus of Boston Consulting Group’s (BCG) new report, Emerging Challengers and Incumbent Operators Battle for Asia Pacific’s Digital Banking Opportunity.
Competition and growth in APAC
Asia-Pacific (APAC) is home to 20 percent of global Digital Challenger Banks (DCBs). They are largely dominated by consortium-led players driven by technology giants and non-financial institution organizations – WeBank, Rakuten Bank and KakaoBank to name a few.
