Digital Bank Research Articles

A Change Management for Transformation of Digital Banking In Indonesia

Bank 4.0 is about the ease of accessing banks or making banks in our hands. Also, the utility whenever and wherever we need financial solutions, in real-time, is programmed according to the behavior of each customer. Banks in their development can choose to change their business model towards digital banking. For this reason, it is necessary to carry out a good change management strategy so that the digital bank transformation process can be carried out. Not only those who are directly involved in the Change Management project but stakeholders within the organization are also involved. This study uses qualitative descriptive methods to design how change management strategies help banks transform into digital banks. The author collects several theories to explore the use of change management in organizations more deeply. In implementing change management, organizations can use a framework as introduced by Kurt Lewin, John Kotter, or the ADKAR framework from PROSCI. The ADKAR model is considered to have advantages in identifying gaps that occur during the change process by instilling awareness, desire, knowledge, ability, and reinforcement. The impact of this transformation led to changes in the organizational structure, business processes, and use of technology within the bank. It is hoped that applying the ADKAR model can help banks change their business models toward digital banking.

Analysis of the Factors Influencing Customer Switching Behaviour of The Millennials in Digital Banks

Analysis of the Factors Influencing Customer Switching Behaviour of The Millennials in Digital Banks

Effect of service to satisfaction and the impact on loyalty of Brimo users

Brimo is one of the digital banks owned by Bank Rakyat Indonesia, which has various features that can help the activities of its users. In banking companies, high-quality service to meet customer needs is a demand in surviving in a competitive business environment. It can be analyzed using the dimensions of the e-servqual. This study aims to analyze service and satisfaction and its impact on Brimo user loyalty by using modified e-servqual dimensions: efficiency, reliability, responsiveness, user-friendliness, personal need, assurance, security, and site organization. Research data collection using questionnaires with purposive sampling techniques obtained 406 respondents who matched the criteria. Data processing is carried out using the structural equation model-partial least squares. The research results, namely reliability, user-friendliness, assurance, security, and site organization have a positive and significant effect on customer satisfaction. Other variables, namely efficiency, responsiveness, and personal need, do not have a positive and significant effect on customer satisfaction. Furthermore, customer satisfaction has a positive and significant effect on customer loyalty. The implication of this study is that Brimo is advised to improve its user interface to be more well-organized to increase customer satisfaction.

The Rise Strategy Marketing Msmes: Transformation Digital Seabank as Branchless Banking in Indonesia

Purpose: The aim of this study is to examine Digital technology can be used to streamline business transactions, saving money and time. For example, if a company has branches in several cities, it is no longer a problem to transfer any transaction fields. Theoretical framework: There are challenges for MSMEs players who need to go digital, so they need to make adjustments to these problems. This obstacle forces MSMEs actors to change their business model to a fully digital form. Methodology: The research is the bibliometric. Data collection technique is to combine various research sources related to branchless banking as MSME empowerment and then narrow it down to find innovation. The subject of this research is MSMEs in Indonesia that use Seabank as a promotion method and transaction system. The analysis technique used is Vosviewer. Findings: The results of this study are that Sea Bank is a banking service that prioritizes customer experience and business value to create a sales value chain to create connections between business models that will continue to grow. Then as a branchless banking-based digital bank. Sea Bank is a financial services company focused on customer experience and enterprise value to transform value chains and create links across business development models. Research, Practical & Social implications: The is Bank Digital, Sea Bank is service banking Which prioritize experience customer And mark from business, so that can become chain mark For intertwine linkages between model business Which will Keep going develop. Then, as Bank Digital, Sea Bank is service finance Which focus on experience customer And mark company For transformed become value chains And create connection between model business Which develop. Originality/value: The Value there are many studies that discuss digital transformation but we believe that the value of this research lies in the novelty of the awareness of MSMEs actors to increase its promotion by using the Brachless Banking Digital Bank, so that this topic can make it interesting.

Stateless Money? Cryptocurrency and Digital Banking in Brazil

The world financial crisis of the late 2000s was for some the dawn of a new era in which state currency monopolies would be replaced by privately-issued digital currencies following strict rules of supply growth. Rather than trust big government and big banks with our money, cryptocurrencies would allow us to “trust the code” and the “mathematical structure” of blockchain technologies. In Brazil, as elsewhere, this neoliberal techno-utopia has not arisen. Though their use as speculative assets has increased, cryptocurrencies have not become a popular means of payment. The use of electronic money, on the other hand, issued by novel corporate entities called payment institutions, is now commonplace. Unlike cryptocurrencies, digital banking and electronic money in Brazil rest on a solid legal and institutional framework designed to incorporate them into the payments system. Digital banks enjoy most of the privileges bestowed upon traditional banks, making it possible for customers to use digital accounts in the same manner as a traditional checking account. In short, digital banks have become privileged members of Brazil’s state-led “pay community” and this is why they have flourished. Even in the digital era, money is a creature of the state.

البنوك الإسلامية الرقمية من وجهة نظر شرعية (تجربة دولة الكويت)

هدفت الدراسة إلى صياغة إطار نظري لماهية التحول الرقمي في القطاع المصرفي، مع بيان لفكرة البنوك الإسلامية الرقمية وفق رؤية شرعية، علاوة على ذكر التجارب الكويتية للبنوك الرقمية ومدى اتساقها مع موقف الاقتصاد الإسلامي. وتضمنت الدراسة الإشارة إلى خصائص وأقسام البنوك الرقمية بشكل عام، والبنوك الإسلامية الرقمية بشكل خاص، ناهيك عن موقف الاقتصاد الإسلامي من هذه البنوك، بالإضافة إلى ذكر تجربة البنوك الإسلامية الرقمية في دولة الكويت، وقد توصلت الدراسة إلى أن البنوك الإسلامية الرقمية تسهم في تحقيق مقصد حفظ المال في الشرع، وتحقق القواعد الفقهية في التيسير ورفع المشقة، كما تعزز من الاستقرار والشمولي المالي، وهي تتوافق في ذلك مع منهج الاقتصاد الإسلامي من خلال الامتثال لتعليمات هيئة الرقابة الشرعية، كما أن بنك الكويت المركزي سن تشريعات تنظم نشاط البنوك الرقمية، وأن البنوك الإسلامية الكويتية قدمت العديد من التجارب الرقمية المنسجمة مع موقف الاقتصاد الإسلامي. الكلمات المفتاحية: البنوك الرقمية، البنوك الكويتية، البنوك الإسلامية الرقمية، التحول الرقمي.

A New Era of Banking in Georgia: Prospects of Digital Bank

The development of digital banks represents an essential innovation in the banking industry. These banks are financial institutions that offer services such as online banking, mobile banking, and virtual debit cards. Digital banks offer customers low fees, a convenient interface, innovative products, and 24-hour banking services. Digital banks are expected to become even more popular and offer many innovative products. During the last few decades, the banking sector in Georgia has developed very actively. Leading banks have created many innovative products and listed their shares on the stock exchange. In the business sector, banks have created a certain trend associated with innovation and development. The regulations, policies, etc. adopted by the National Bank of Georgia have established a single standard in the banking sector, thereby protecting the interests of consumers and creating common rules for the financial sector. Along with constant changes, the National Bank of Georgia also develops new directions for the banking sector and tries not to lag behind world trends. On November 17, 2022, the National Bank of Georgia issued the first license for digital banking activities. According to the digital bank licensing principles developed by the National Bank, after assessing the applicant's business model and compliance with the requirements established by law, a banking license is issued with certain restrictions, and a deadline is set for the full operation of the digital bank and the gradual filling of the minimum amount of supervisory capital. What opportunities does the development of digital banks in Georgia give us, and what is the experience of international digital banks? In the modern world, the development of globalization and information technology has made it urgent to move the economy to a fundamentally new level. It should be noted that the use of existing methods in the modern economy does not contribute to rapid growth, and the digital economy allows a country to significantly change its position on the world stage. This leads to the generally accepted opinion that the development of the country as a whole is possible with the effective introduction of modern technologies in all spheres of the economy. An ecosystem is a group of organizations that provide continuous interaction with each other using Internet services, technological platforms, government services, and information systems. Initially, the active implementation of digital technologies began in the banking sector, which controlled gold and currency flows. As the most important segment of the economy of any state, the financial sector today reflects the most progressive solutions in digitalization. The innovations proposed in this area aim to improve financial efficiency through better and more personalized services, as well as lower costs for clients. Today, the financial system is undergoing a new evolution in the digital economy. Digital transformation is transforming business models and the banking sector, from the creation of internet banking to remote financial transactions. Thus, modern technological evolution serves as the basis for the sustainable and long-term growth of banks' activities. Keywords: Digital bank, Innovative products, Modern technologies, POS terminal, Digitalization, E-commerce, FinTech, Online orders.

Multigroup Analysis Eastern Indonesian Millenial Behavior in Using Digital Bank

Transaction value at digital banks grew by around 50.3 percent to 34.3 trillion rupiah when compared to April 2021, digital banks increased deposit interest rates to 7%. This figure is higher than commercial banks which are only 0-4%. This study examines more deeply whether East Indonesian millennials consider LPS Lebel in using and saving at digital banks. East Indonesia was chosen because the number of financial literacy is quite low. The data analysis method uses SEM-PLS and uses a gender and regional/domicile multigroup test, a use analysis of 125 respondents spread across 12 provinces in Eastern Indonesia. The results of the analysis explain that the LPS label variable (LL) and the deposit interest rate (TB) have a positive effect on the interest of Eastern Indonesian millennials in saving at digital banks. However, 88% of Eastern Indonesian millennials do not know exactly what percentage of interest is guaranteed by LPS. In addition, multigroup analysis explains that gender is not an influence on the interest of East Indonesian millennials in saving at digital banks. Meanwhile, the domicile or place of residence between respondents on the island of Sulawesi and outside the island of Sulawesi also does not have a difference

Digital Bank Financial Soundness Analysis at PT Bank Jago Tbk.: CAMEL Framework Approach

Out of around 250 digital banks in the world, 20% are in Asia Pacific region, and only around 5% have crossed the profitability line. Bank Jago is the sixth digital bank in Indonesia. The objective of current research is to analysis financial soundness of PT Bank Jago Tbk under CAMEL framework which includes capital, assets quality, management, earnings, and liquidity. This study employs non-statistical quantitative methods. Sampling method was utilized is purposive sample technique. The data utilized is secondary data on the financial performance of CAR, KAP, NIM, ROA, and LDR, presented as a yearly time series from 2018 to 2022. The data was taken from PT Bank Jago's yearly report, which is accessible at the bank’s web address. Data analysis was carried out by employing a horizontal analysis technique. Finding of the study conclude that Bank Jago has very strong capital, as indicated by the CAR ratio. Bank Jago's asset quality as reflected on KAP ratio is in good condition. Bank Jago's management, as indicated by the NPM ratio, Bank's profitability as indicated by the ROA ratio, and Bank’s liquidity reflected by the LDR ratio, all off still at an unhealthy level. Going forward, Bank Jago will implement a plan to boost lending by working with partners in a variety of financing goods in order to enhance financial performance.

DAMPAK INKLUSI KEUANGAN TERHADAP RISIKO KREDIT PADA PERBANKAN DIGITAL DI INDONESIA PERIODE TAHUN 2015-2021

One of the most significant risks for banks, including digital banks, is credit risk. Bank credit risk can be influenced by a number of things, one of which is increasing financial inclusion. Then there is the prime lending rate which is used as a variable control in this study. The purpose of this study is to identify and analyze the impact of financial inclusion on credit risk in Indonesian digital banks. This study employs panel data from four Indonesian digital banks from 2015 to 2021. Panel data regression is the regression model that was used, and the hypothesis was tested with the t test, the F test, and the coefficient of determination. Financial inclusion has a positive and insignificant effect on digital bank credit risk in Indonesia on the accessibility dimension, a negative and significant effect on the usage dimension, and for prime lending rates it has a positive and insignificant effect on digital bank credit risk in Indonesia. This indicates that digital banks in Indonesia can reduce their credit risk by utilizing financial services. So that increasing financial inclusion through the use of financial services must be further improved while still paying attention to the prudence principle.

Prawo ochrony danych osobowych w zarządzaniu bankowością elektroniczną w Indonezji

In Indonesia, digital banking is advancing at a fast pace. As the law regulating it is incompatible with the current digital banking, it is necessary to establish new law capable of adapting to the development of digital banking because of the high number of digital account break-ins experienced by customers due to a lack of adequate regulations such as the law governing digital banking. Since digital banks are regulated in the Financial Services Authority (FSA) regulations, they have been unable to address risk issues due to insufficient binding force. This study employed a normative approach by collecting data: library research and discussions. The study’s findings indicate the governance of digital banks has flaws: vulnerability to identity theft, online crime, malware assaults, and the inability in accessing by all parties. Regulations governing personal data protection are largely outlined in Article 26 of Law No. 19 of 2016. This rule does not go into depth about personal data security in digital banking governance, thus it can lead to multiple interpretations. Subsequently, Law No. 10 of 1998 on financial is a banking regulation based on conventional not digital. Therefore, these two regulations are incompatible with digital banking governance in protecting personal data and giving legal clarity. Regulations No. 12/FSAR.03/2021, No. 13/FSAR.03/2021, and No. 14/FSAR.03/2021 regulate digital banking. These provisions have flaws: the ease of obtaining licenses, emphasizing administrative punishments, lack of binding force, and the absence of regulations governing personal data protection in digital banking governance in Indonesia. Therefore, it is urgent to regulate personal data in one specific law.

Behavioral Intention and Adoption of Digital Bank Mobile Application Among Housewives Using Mixed Method Approach

This mixed-method research using PLS-SEM and fsQCA analysis aims to identify the factors that influence the behavioral intention of Indonesian housewives to adopt digital banking applications, particularly by examining the UTAUT2 model's variables. The study found that facilitating conditions, price values, and habits are significant factors that affect the behavioral intention of housewives to use digital banks. Furthermore, the study suggests that paying attention to the factors of effort expectancy, social influence, facilitating conditions, and habits simultaneously is the most effective approach to generating behavioral intention factors in digital bank adoption. The findings have important implications for digital bank companies, the government, financial institutions, and fintech startups. Future research should strive to obtain a more even distribution of respondents from different regions in Indonesia to reduce bias and obtain results that truly represent the conditions of housewives in Indonesia as a whole. 

The Effect of Net Interest Margin as a Mediator and Selected Factors in Determining the Profitability of Digital Banks

The Effect of Net Interest Margin as a Mediator and Selected Factors in Determining the Profitability of Digital Banks

Improving the Regional Economy and Bank bjb Fee Based Income by Forming a Digital Ecosystem in West Java Province Using Bank bjb Digital Products

Bank bjb as a regional bank is required to support West Java Regional income with services and products that are profitable for banks, shareholders, and customers. Currently bank bjb has carried out digital transformation by producing digital products to increase customer satisfaction in transactions to generate fee-based income. Currently, net profit from the fee-based sector is still very small when compared to total income, fee-based income is only able to contribute less than 7.1% of total income. So that it is a challenge for bank bjb to be able to increase fee-based income from its digital products. The author uses STP analysis and marketing mix (7p) for internal analysis, where the results show that the strategy implemented is still not hitting its market share and Bank bjb is still targeting local government employees to offer its digital products. PESTEL, Porter 5 Forces, Competitor Analysis, and Consumer Analysis tools are used for external analysis. From the PESTEL analysis, it was found that if bank bjb wants to carry out digital transformation and form a digital ecosystem, it needs to ensure regulations from regulators. From Porter 5 Forces, it is found that threats in the financial industry today do not only come from banking but the emergence of financial technology. From Competitor Analysis, it is found that there are many choices regarding digital products for consumers. For Consumer Analysis, the author uses qualitative interviews with the 7p marketing mix conducted with bank bjb employees, customers, and non-customers. From consumer analysis, it is found that there is a low consumer perception of digital bank bjb products. After finding the root of the problem, bank bjb needs to determine the right strategy to increase fee-based income and West Java's local revenue. Therefore, bank bjb will determine a strategy in the form of Proposed Marketing Mix and Proposed Marketing Communication Strategy such as forming a digital ecosystem with third parties, enriching features in digital products, promotional programs, and others. Which in turn will increase transactions that generate fee-based income and regional income, especially for the West Java regional government.

The Influence of Perceived Usefulness, Perceived Ease of Use, and Perceived Enjoyment on Customer Intentions to Move From Non-Digital Banks to Digital Banks

ABSTRACT Research Aims: The digital bank system is relatively new at this time, and the development of digital banks is growing significantly, both in terms of the number of digital banks and their customers. The technology system used is relatively new. There are various advantages of digital banks, but digital banks can generally make them more efficient. This study aims to determine the influence of perceived usefulness, perceived ease of use, and perceived enjoyment on customer intentions to move from non-digital banks to digital banks Methodology: The sampling technique of this study used purposive sampling, with a total of 170 respondents. Research Findings: The results of this study show that the variables perceived usefulness, perceived ease of use, and perceived enjoyment directly affect customer intentions to move from non-digital banks to digital banks.

Factors Affecting Digital Banking Customer Satisfaction in Indonesia

This paper aims to determine the factors that influence the satisfaction of using digital banking. The method used is UTAUT (Model Unified Theory of Acceptance and Use of Technology) 2 Modification to help specify variables such as Responsiveness, Usefulness, Ease of Use, History, Access Control, Data Privacy, Assurance, etc. Trust, Quality Transaction, User Intention, and User Satisfaction. This research collects data in a questionnaire distributed to digital banking users through a non-probability sampling method using a data collection technique, namely, snowball sampling. For information, the number of respondents obtained is 410 respondents, of which 56% are male and 44% are female. Further analysis concluded that the various variables significantly affect user satisfaction in using digital banks. For example, the access control variable has a value of 3.453 (on t-statistics), which shows that the access control variable has a significant value among other variables.

Menggagas Pendirian Bank Digital di Indonesia: Sebuah Telaah Yuridis

In the industrial era 4.0 as it is today, the ease and speed of getting things are highly sought after, including the ease and speed of getting financial services. The convenience of banking services is an advantage for consumers in choosing the services provided at the bank. This is what banks do to form services from conventional banks to open digital services. However, from a juridical aspect, in Indonesia there is no specific regulation governing digital banks. As a country that adheres to the civil law system, it has become a real consequence that all applicable laws must be codified and regulated in accordance with applicable laws. Problems arise when digital banks operate but there is no legal basis that specifically regulates dealing with it. Through normative juridical methods, research results showed that there are no specific rules governing digital banks in the form of laws in Indonesia, so a special rule is needed regarding digital banks because there are significant differences from conventional banks.

Utilization of Blockchain and the Roles of Banks in Indonesia in Tackling Environmental Challenges: A Qualitative Research

This dissertation investigates the readiness of the blockchain technology to be utilized in the upcoming Indonesia’s Emissions Trading Scheme, also the roles of banks and digital banks in the ETS using PESTEL analysis. The study found that Indonesia still lacks the infrastructure to implement the blockchain technology, while banks in Indonesia has huge roles in the scheme including preparing the infrastructure. With a large and growing population, Indonesia has the potential to develop the human resources necessary for blockchain development. However, finding skilled programmers remains difficult. The relationship between blockchain and the environment is also examined, with experts debating its potential benefits and drawbacks. In addition, the thesis analyzes Indonesia’s efforts to mitigate and adapt to climate change, including its participation in international agreements and infrastructure improvements. Finally, the thesis considers the role of financial institutions in promoting emissions trading and the challenges they face in doing so. Overall, the thesis highlights the complex and interconnected factors that influence the adoption and development of blockchain technology in Indonesia.

Indonesian Digital Bank Stock Valuation: Case Study of Bank Jago in 2022

In 2019, in the midst of the early stage of the digital banking industry in Indonesia Bank Arto underwent a transition and rebranded as Bank Jago, a digital bank. As a result of Bank Jago’s transition from a traditional commercial bank into a digital bank, the company’s stock reached an all-time high share price of Rp 19,000 per share in January 2022. This was the highest share price the company had ever achieved. The public’s excitement eventually subsided, however, and this resulted in a decline in the price of the company’s shares. The price per share of Bank Jago was recorded at Rp 4,200 in November of 2022, which was 77% lower than the price recorded in the beginning of 2022. This research will analyze the financial performance of Bank Jago through the utilization of financial ratio analysis, and to determine the intrinsic value of Bank Jago through the utilization of absolute valuation using the Dividend Discount Model as well as the competitiveness and environment of the Indonesian digital banking industry using PESTEL and Porter Five Forces. From the Porter Five Forces, Indonesian digital banking industry indicates a high level of competitiveness, whilst the industry itself in Indonesia through the PESTEL analysis indicates that it will continue to grow due to the level of support from the political and government factors. According to the analysis of financial ratios, Bank Jago’s profitability has increased significantly over the past three years, as indicated by the rapid growth rate of the NIM, ROE, and ROA ratios since the time of its transformation. With a ratio of 145.86%, Bank Jago displayed a level of liquidity that was unsatisfactory. According to the projections using Dividend Discount Model, Bank Jago’s intrinsic value is currently undervalued by -23%.

ANALYSIS OF THE EFFECT OF INCOME DIVERSIFICATION ON BANK PERFORMANCE AND BANK RISK WITH OWNERSHIP STRUCTURE AS MODERATING VARIABLE IN DIGITAL BANKS IN INDONESIA

This study aims to analyze the effect of income diversification on performance and risk in digital banks, and examine the moderating role of the ownership structure variable as proxied by concentrated ownership of the effect of income diversification on bank performance as measured by ROA and Tobins's Q and bank risk as measured by Z. -Score on digital banks in Indonesia. The research data is taken from the financial statements of banks listed on the Indonesia Stock Exchange (IDX) for the period 2020-2021. The number of samples used in this study was 70 using purposive sampling technique. The analytical method used is Multiple Linear Regression and Moderated Regression Analysis. The results of this study state that income diversification has a positive and significant effect on bank performance as measured by ROA and Tobin's Q. Also, it has a positive and significant effect on bank risk as measured by Z-Score. In addition, this study shows that banks with concentrated ownership have a negative and significant effect in moderating the effect of income diversification on ROA. Meanwhile, banks with concentrated ownership are unable to moderate the effect of income diversification on Tobin's Q and Z-Score.