Closer to home, banks across Southeast Asia are reporting an unprecedented surge in digital services and an increase in the registration of digital banking accounts in the last few months. In Indonesia, state-owned Bank Rakyat Indonesia saw a 10 percent month-on-month increase on its mobile banking channels alone. Similarly, in the fintech space, online lending is seeing a rise in demand as companies across the country are placing staff on unpaid leave, or dismissing them altogether.

Today, Indonesia is a market ripe for digital banking because of its largely unbanked population and high mobile penetration rate. However, to keep pace with growing demands, traditional banks with legacy models are faced with the urgent challenge to digitally transform their services as COVID-19 intensifi es both consumers and businesses’ need for availability, access, and control of digital banking services.

While incumbent powerhouses like DBS and Indonesia’s Bank Tabungan Pensiunan Nasional (BTPN) have launched standalone digital off erings, big techs such as Gojek’s GoPay and Lippo Group’s OVO are fast encroaching into the same space for a share of the pie.

Together, they account for more than 55 percent of all digital payments in the country. Further to this, Facebook is also preparing to apply for regulatory approval to launch a unifi ed payment service in Indonesia.

In light of these rapid developments, banks need to take on a “start small and think big” mentality. Incumbent banks need to look for rapid implementations and quick minimum-value-proposition (MVP) launches to innovate.

This is where a lego building block architecture like Backbase can provide banks with a headstart through a flexible platform on top of which banks can continuously innovate. This lego analogy or modular setup paves the way for faster, more agile ways of working. Such a modular architecture allows banks to create and alter processes, products or channels as needed, without severe repercussions to the overall legacy infrastructure. Modular banking is the key to fi netune processes, driving efforts towards a future-proof digital banking platform.

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