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KONTAN/Andrianus Octaviano
The Industry Is Showing Positive Growth, And Digital Banks Are Expected To Have A Bright Future
Thursday, 05 Dec 2024
The outlook for digital banking in Indonesia in 2025 is expected to remain bright, following a positive performance in the industry in 2024. Digital banking transactions in the country grew by 37.1% year-on-year in October 2024. Additionally, the net interest margin (NIM) for national digital banks is projected to increase by 8% in 2024, reaching USD 3.60 billion. This growth aligns with the rising interest among the public in digital banking services. A survey by Jakpat revealed that 49% of Indonesians have used digital banking services.
Anton Hermawan, President Director of PT Krom Bank Indonesia Tbk, stated that the digital banking industry shows promising prospects, especially since 48% of the population is still underbanked. Furthermore, total deposits in digital banks account for less than 1% of all banking deposits in Indonesia. He believes there is significant room for growth in the digital banking sector next year.
Krom Bank is set to close 2024 with strong performance, as its third-party funds (DPK) have increased more than 15 times since the launch of its digital banking app. By October 2024, Krom Bank reported a net profit growth of 4.18% year-on-year, amounting to Rp 120.215 billion.
Savings and deposits continue to be the main contributors to Krom Bank's DPK growth. As of October 2024, savings grew over 20 times year-on-year to Rp 350.6 billion, while deposits increased more than 15 times year-on-year to Rp 2.2 trillion.
To enhance its digital services, Krom Bank has introduced various innovations throughout 2024, including the Money Journey feature to help customers manage their budgets, BI-Fast services, and QRIS and electronic money card top-up services to support cashless transactions.
The variety of innovations reflects Krom Bank's commitment to developing proactive and adaptive digital infrastructure. The support from our in-house technology team allows us to offer more proactive, adaptive, and innovative digital banking solutions, Anton added.
Moreover, as a fully digital financial service, digital banking is closely linked to the younger generation. A Populix survey found that 60% of digital bank customers are from Generation Z. This situation drives digital banks to continuously provide practical and efficient services. The survey indicates that people prefer digital banking for quick fund transfers (66%), integration with other payment services (64%), and affordable administrative fees (64%).
In addition to being practical and efficient, young people also tend to choose services that offer access to financial products like savings or investments with competitive returns. Another Populix survey revealed that 23.4% of millennials and 14.2% of Generation Z use digital financial services to obtain high interest rates and guaranteed returns.
With increasingly diverse and complex customer preferences, Krom Bank will remain committed to enhancing the services on the "Krom" digital banking app. "We will also integrate with our strategic partner ecosystem and focus on gathering third-party funds to ensure sustainable company growth," Anton concluded.
