Jakarta, CNBC Indonesia – The banking trend which has begun to reduce the number of branch offices and Automated Teller Machines (ATM) is considered to be a reflection of the impact of the transformation of digital banking services in Indonesia. If conventional banks do not adapt, it will have an effect on prospects in the midst of intense competition.
“Technological advances, consumer behaviour, intense competition between banks and new threats from ‘new banks’,” said capital market analyst Rovandi in his message to CNBC Indonesia, Friday (23/7/2021).
The former analyst of PT Trimegah Sekuritas Indonesia Tbk (TRIM) assessed that the trend of the emergence of digital banks was inevitable, especially with the collaboration with payment platforms.
“Like Gopay, OVO, PayPal and others, the closing of glass and ATMs is only cycle small part of the digital transformation that lies ahead. Today’s big banks if they don’t transform they will go crazy, but right now they are [bank-bank besar] also the fastest to adapt if we look at it,” said Rovandi.
For information at this time, there are at least seven banks in the process of applying for a digital service license at the Financial Services Authority (OJK). They are PT Bank Digital BCA, PT BRI Agroniaga Tbk (AGRO), PT Bank Neo Commerce Tbk, (BBYB). PT Bank Capital Tbk (BACA), PT Allo Bank Indonesia Tbk (BBHI), PT Bank QNB Indonesia Tbk (BKSW), and PT Bank KEB Hana.
In fact, OJK has also mentioned the trend of shifting customer transaction patterns, which are starting to take advantage of digitalization compared to conventional banking branches (kab).
From previously transacting at the branch office, switching to transactions at ATMs and transactions at ATMs began to be abandoned by customers.
OJK noted that the number of bank branch offices has also decreased by more than 3,000 branch offices in the last 6 years.
OJK Deputy Director and International Banking Tony said the rise of digital banking transactions encouraged banks to choose not to open new branch offices because they were considered inefficient.
“In the last few years, there have been very many transactions carried out at various banks through their mobile apps. As a result of the proliferation of transactions via their mobile phones, it has an impact that people rarely go to bank branch offices so that banks see the establishment of branch offices as being inefficient and they begin to cover a number of office and start switching to electronic services,” said Tony some time ago.
From the material presented by OJK, the number of banking branch offices as of March 2021 totaled 29,889. This number is down from the position in December 2020 which was 30,733 branch offices.
This decline is also in line with the decrease in the number of commercial banks from 109 banks at the end of last year to 107 banks at the end of the first quarter of 2021.
Meanwhile, at the end of 2015, there were 32,963 branch offices operating from 118 commercial banks operating in Indonesia.
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