The Indonesian banking platform being launched by the messaging platform is the outcome of a 2018 agreement. The $182 million (JPY 20 billion) investment in the country’s digital payments network will go to improve online and traditional banking services including deposit accounts, microcredit products and remittance and payment services.
Online banking has evolved into the most convenient service for paying bills, transferring funds, and accessing a record of your checking account activity all from the convenience of a web browser. Everything related to personal finances easier when people can bank from the comfort of their own home, at any time of day or night. Digitalisation is transforming how people interact and conduct business on a daily basis, and advances in banking technology are influencing the future of financial services all around the world. The banking industry is being transformed by increased demand from millennials and Gen Z’s for a digital banking experience.
Mobile banking or online banking has become a major differentiator for banking leaders since it allows consumers to make deposits, account transfers and manage their expenditure and profits. Online banking has been a more important feature in banking services among respondents since the commencement of the coronavirus pandemic. Financial institutions are increasingly eager to know which mobile banking services customers enjoy the most and where they stand in comparison to their competitors so they can work in certain sectors.
According to a report, downloads of digital banking apps in Indonesia has increased by 7% last year with apps from major banks in Indonesia leading the way. However, many other Indonesian digital bank users tend to download various digital bank applications. However, a major issue is that users tend to uninstall the banking app within the first 30 days of download. This is an indication that a dominant provider has yet to develop and the reason why a messenger service that encourages more participation could be an ideal solution.
The Tokyo-based chat app, founded in early 2014, extended its reach into digital payments in July last year. Since then, the company has rapidly expanded its banking operations to support its massive user base of 50 million registered customers, which is roughly double the number of individual accounts held by Japan’s largest megabank. Being one of the most popular apps in Asia, this messaging platform has been making money through its cross-industry investments into the banking and finance sector. The corporation is already investing heavily in cryptocurrency, announcing last year that it would offer loans, insurance, and other services backed by its own digital currency.
Apart from Japan, the messaging platform carries a strong corporate bond in three of Southeast Asia’s most important markets – Thailand, Taiwan and Indonesia. The messaging app has introduced its banking services to its Thai users last October as part of a joint venture with a local bank. In Taiwan, its subsidiary was granted a banking license earlier this year by the Financial Supervisory Commission.
The messaging app has over 165 million monthly active users and 40 million registered to their banking platform, according to company research. The company is expanding its footprint across Asia but has not made an entry in Singapore as yet. Nevertheless, in September, the app announced that it would raise $1.33 billion through convertible bonds to expand into the island nation’s financial services market.
Indonesia is keen on digitalisation and has implemented several initiatives and programmes to ramp up digital transformation in the country. This is especially true for small and medium enterprises (SMEs) which are the backbone of Indonesia’s economy, absorbing 97% of the workforce. OpenGov Asia recently reported on a tech firm focused on digitising the 60 million small businesses in Indonesia.
Similarly, a report ranks Indonesia as the fifth largest share (US$ 2.9 billion) of the Islamic financial technology (fintech) market in the world. Reports noted that millennials dominate borrowers on the platform.
