JAKARTA - MNC Sekuritas analyst Widi Tirta Gilang Citradi assesses that the prospects for digital banks next year are still promising, despite challenges such as weakening people's purchasing power, inflation, and high interest rates.
"If inflation is successfully tamed and the benchmark interest rate has started to moderate, digital banks can fly again but with a number of conditions," Tirta said in his statement, quoted from Antara, Wednesday, December 28.
According to him, the most basic requirement is the ability of digital banks to expand ecosystem cooperation and be able to control potential risks. "These are two inseparable things. To grow, digital banks must be able to increase business partners. The problem is, expanding partnerships is the same as increasing the level of risk," he said.
If you rely solely on ecosystems based on your own group or one affiliate, digital banks face two challenges. First, the risk is concentrated at one point. Second, banks are not motivated to increase their capacity because they are too comfortable with their own groups.
"Digital banks that currently rely too much or are fully backed up by the group's own ecosystem do look superior, but that there will be a limit. When they realize that they need to expand out of the ecosystem, they actually find themselves left behind by competitors who are actually aggressive in building collaboration with many ecosystems," he said.
For digital banks that dare to expand to build an ecosystem outside of themselves, they will face one challenge, namely risk management. It could be that the collaboration failed or did not develop as expected.
"There is a risk of increasing NPL, market risk and legal risk if the integration fails. But if these various risks can be controlled and mitigated, they will enjoy extraordinary business growth," he said.
Tirta assessed that so far Bank Jago looks more prominent in terms of collaboration with many partners of various types of services. What Bank Jago has done is not only embedded in the GOTO ecosystem, but also in other ecosystems such as Stockbit and Bibit.
"Not to mention the collaboration plan with BFI Finance (BFIN) and Carsome. This will be Jago's entrance to automotive and consumer financing," said Tirta.
Nomura Sekuritas also mentioned that one of the pillars for Bank Jago's success is cooperation with various partners. In a research report published limited on March 1, 2022, it was stated that partnerships with Gojek, HomeCredit, Kredit Pintar, would provide wide access to financing customers and merchant bases in the ecosystem.
Meanwhile, the Executive Director of the Segara Institute Piter Abdullah assessed that collaboration with the ecosystem is a necessity for technology-based banks. Collaboration will be stronger if banks and their partners present a long-term value.
He described features that make it easier for customers directly to encourage customers' loyalty in using digital bank applications.
"If the customer is comfortable using the features in the application, he will continue to use it. The convenience and comfort are a priority rather than the interest offered," said Piter.
Piter added that digital banks also need to be diversified in collaborating with the digital ecosystem. According to him, the more and the more partners partnered, the risk will be increasingly spread.
He considered what Bank Jago did with the number of ecosystems that were partnered with was right. Although not the largest digital bank, Bank Jago was able to print profits first compared to its competitors. The ratio of problematic credit is also in the low range, indicating risk management is going well.
Based on Bank Jago's financial report as of September 2022, the NPL ratio reached 0.59 percent, lower than Bank Neo Commerce (1.86 percent) and Seabank (3.26 percent) which had higher assets.
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