Bank Strengthens Investment Ecosystem, These Three Products Become Targets For The Young Generation

Photo: Doc. Danamon

JAKARTA - Millennials and Gen Z today increasingly have the awareness to invest, especially through investment platforms that offer a variety of accessible features and products. In line with this trend, banks must be able to keep up with the times and accommodate these preference trends by strengthening their investment ecosystem, either through innovation of new applications or by working with existing investment platforms.

In a recent survey conducted by Jakpat related to the Indonesian Fintech Trend in the first semester of 2023, it was found that 50 percent of millennials and gen Z admitted that saving and investing were very relevant to their lives. 1 in 4 of these generations even stated that they actively manage investment portfolios.

The survey conducted with the number of respondents around 1,425 reported that millennials and gen Z are very familiar with investing through certain investment platforms, including applications developed by fintech. About 60 percent of respondents confirmed that fintech is registered and has official permission from the OJK as the basis of their choice. Another reason is because it has an easy payment method (56 percent), and a user-friendly (52 percent) factor.

"When we talk about investment products that are the most targeted, the ones that are most popular with millennial consumers and Gen Z, there are three products, namely mutual funds, stocks, and precious metals. These three investment products occupy the top choices, based on the results of the survey that we conducted," said Aska Primardi as Head of Research. Jakpat, Wednesday 8 November.

Aska further explained that mutual funds and stocks occupied first place (selected by about 43% of people), while precious metals occupied second place (selected by about 30 percent of people).

Aska said millennials and gen Z are an indisputable generation that is financially literate and understands the importance of managing finances. In line with the preferred investment products chosen, the types of investors of the younger generation are currently divided into three groups. 54 percent are of the moderate type, which prioritizes the balance between risk and return, 41 percent are consumers, who choose to avoid risks, and 5 percent are aggressive, who are willing to take high risks for higher returns.

"The majority of them say that the goal of investing is for additional income, in addition to forming emergency funds for unexpected needs, and others are already thinking of preparing pension funds," he said.

Chief Digital Officer of PT Bank Danamon Indonesia Tbk Andreas Kurniawan said the trend of investment among the younger generation encourages banks to respond to the needs and hopes of the younger generation. This is also good news for the financial industry, because thus, banking and investment services will continue to be relevant. However, the challenge is that banks must strengthen their investment ecosystems according to Millennial lifestyle and Gen Z.

For Danamon, he continued, the answer to these challenges is collaborating with Bareksa, one of the investment platforms that is currently developing and attracting young people. By integrating the direct debit feature in the Bareksa application, Danamon customers can simultaneously manage finances and investments according to the products available in Bareksa.

On the other hand, Danamon had the opportunity to expand Danamon's customer profile and also facilitated Bareksa users to take advantage of the ease of investing without having to move applications. Danamon can even facilitate the purchase of investment products of up to IDR 1 billion per day, suitable for mutual fund products, stocks, and gold with a fairly large value.

"The Rp1 billion limit is an early stage and will be further improved in line with customer responses. We want to strengthen our commitment to become one-stop financial services providers that help customers take control of all their financial needs and goals," he said.