financialtreat – will explain about Banking As A Service, and Advantages of Using Digital Bank which you will get in the following article. let’s look at this article carefully!
As the name suggests, a digital bank is a bank that runs services online or electronically. Therefore, digital banks do not have physical offices if the central building. Even so, digital banks are still Indonesian Legal Entity Banks (BHI). Well, on this occasion we will review banking as a service, let’s see the following reviews.
Hence, the term digital bank is not a different type of commercial bank. Because they are not institutionally different, digital banks can still be called commercial banks. With banking as a service, it makes it easier for customers to carry out their services.
Understanding, Services, and Advantages of Using Digital Bank
Terms of Establishing a Digital Bank
The establishment of a digital bank does not have to start a new Indonesian Legal Entity Bank. A company can transform from an Indonesian Legal Entity Bank (physical bank) to a digital bank. Digital banks are only required to have one building as the central building. At that time, branches and services did not require a physical building. This makes the opportunity to establish a digital bank more likely for companies to grow.
Even so, the establishment of a digital bank must meet several conditions, namely as follows:
- Digital banking services are technology-based services, so digital banks must have conducive and innovative technology-based businesses.
- Companies must be able to run a wise and sustainable type of digital-based banking business.
- Prospective digital bank companies must be able to form risk management or management to deal with problems that may occur in the future.
- Companies that will become digital banks must be able to meet OJK standards.
- Can be responsible for the security of customer data.
- Prospective digital bank companies are willing to take part in advancing the digital financial ecosystem and fulfilling the rights of the Indonesian population to access banking.
Bank Group Based on Core Capital
The establishment of a digital bank is not without capital. Later, like commercial banks, digital banks will enter one of the Banks Based on Core Capital (Kbmi) groups. The groupings are as follows:
- The first group is a group of banks with a core capital of Rp 6 trillion.
- The second group is banks with core capital between Rp 6-14 trillion.
- The third group is banks with core capital of Rp 14-70 trillion.
- The third group is banks with core capital exceeding Rp 70 trillion.
Special Requirements for Establishing a Digital Bank
The OJK Financial Services Authority does not distinguish between full digital banks and conventional bank digital services, so that special permits are not required. In other words, the presence or absence of the Financial Services Authority label is not a significant problem.
As an Indonesian Legal Entity Bank, digital banks are only required to carry out the regulatory guidelines as a digital bank. Not only that, digital banks must also comply with applicable laws and regulations.
Disadvantages and Advantages of Digital Bank
In an era that is completely online, digital banking is an advancement in the banking world that makes it easier for customers to access. People are now not limited by time and area to connect banks. Classical problems faced by conventional banks such as service queues are not found in digital bank transactions.
On the other hand, digital banking companies do not require additional fees to rent a building. that way, digital banks will reduce administrative costs that are generally assigned to customers. Even so, to open a digital bank you must need the internet. Internet use can be a new expense to replace administrative costs at conventional banks. What’s more, although the possibility is small, the internet world is indeed prone to crime.
Money deposited in digital banks will also change consumer psychology. With the convenience of shopping through e-commerce and the convenience of paying through digital banks, you can become more consumptive.
Various Digital Bank Services
Many people have now experienced digital bank services because most conventional banks are now also providing digital banking services. Some of the digital banking services in Indonesia are as follows:
1. Phone Banking
Phone banking is done by calling the customer to the formal contact center of the bank concerned. These calls can be handled by a direct human source or an automated program that provides an additional menu of transaction options.
2. SMS Banking
SMS Banking is the latest way in its time to make financial transactions. The bank customer will send an SMS to the bank number and apply the order to carry out an exclusive transaction.
3. Mobile Banking
Mobile banking is not much different from SMS Banking. This service is carried out with a special program on the mobile phone SIM card. Therefore, the bank will cooperate with the cellular operator used by the customer.
4. Internet Banking
Internet banking is a financial transaction that utilizes the internet. This method is not limite to special devices or programming carrie out by the bank. Because they already have an account, customers can use their own smartphones and laptops or other people’s.
Digital Banks in Indonesia
There are many digital banks that are formally establishe in Indonesia. Some of them are pure digital banks, while others are units of conventional banks. Some digital banks that are quite popular in Indonesia are as follows:
Jago has become one of the new pure digital banks in Indonesia since it was launche in April 2021 by PT Bank Jago. Jago bank customers can connect to Jago via the application or web site. This digital bank has a share savings feature calle Pockets.
Genius by Bank Btpn
Jenius is a digital account which is a unit of Bank Btpn. Since its launch in 2016, Jenius has been widely use by residents because it collaborates with several merchants. This digital account can be use to pay for various transactions.
Wokee from Bank Bukopin
Wokee is widely use because it makes it easy to top up popular digital wallets in Indonesia such as Go-Pay and Ovo. A lot of interest from Wokee users is due to free registration and the convenience of cardless cash withdrawals at Bukopin’s friend merchants.
Digibank from Dbs
If you have a balance above IDR 1,000,000, then Digibank customers will be free from transfer fees. This digital bank which is a unit of DBS Bank is often use because of its convenience to pay bills for insurance, electricity, internet, and others.
TMRW from Uob Bank
The specialty of TMRW is the credit card service. When a customer is connecte to a TMRW digital account from Uob Bank, they can also create a Tmrw credit card at the same time. This digital bank that combines savings accounts and credit cards has been operating since 2020.
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Applying for Funding Through Resident’s Capital
With the increasingly sophisticate world of banking, borrowing funds can be done digitally. This can be done through Resident Capital. With easy terms and formal mechanisms, you can apply for funding which will later be sent via digital bank services.
Resident Capital is a medium that brings together business people with truste sources of funds. To learn more about Community Capital Digital payment services are mushrooming in Indonesia. The high penetration of the internet and the emergence of technology companies are some of the triggers.
In addition, digital payments have also increased during the pandemic. Digital payments were chosen because user do not have to bother preparing cash when transacting as an effort to suppress the spread of the Covid-19 virus.
Bank Indonesia (Bi) noted that digital transactions in the financial sector continued to increase. The central bank noted that digital payments had increased to 60.25 percent annually (annual on year / yoy), with transaction values reaching Rp3.4 trillion.
The digitalization of payments in question consists of mobile banking, internet banking, and phone banking. Not only that, transactions using electronic money (E-Money) also increased by 43.6 percent yoy to reach Rp24.75 trillion.
“We note an upward trend in digitization from digital banking transformation through bank digitization, the formation of digital bank units, as well as the formation of new banks,” said Director of the Payment Platform Policy Department of Bank Indonesia (Bi) Retno Ponco Windarti in a written statement received.
Another digital transaction that is experiencing development is through the Indonesian Standard Quick Response Code (Qris). BI said, QRIS transactions grew to 163 percent. Meanwhile, the number of merchants using QRIS is also increasing, which is 11.7 million. Merchants on the island of Java still dominate the QRIS market at 68.26 percent. Meanwhile, in terms of value, QRIS transactions reached Rp. 2.3 trillion.
Well, those are some reviews that discuss banking as a service, hopefully the discussion above can help so much and thank you.