Banks are playing catch-up to technology players in one of the world’s largest unbanked markets.
Bank Central Asia (BCA) is boosting its digital capabilities amid increased competition from tech players in the banking space, according to a report on Wednesday.
Indonesia’s biggest lender by market value will be investing $200 million to help its month-old digital unit Blu to increase market share ahead of an initial public offering in two years’ time. Blu currently has about 110,000 customers.
BCA is targeting a fourfold increase in its capital, to four trillion rupiah (S$376.5 million), and is focused on gaining more customers, partners and merchants on its digital platform before the IPO, BCA president director Jahja Setiaatmadja told the publication.
The country has an unbanked market of 83 million people, or about one-third of the population, and while traditional players have found it tough to expand across the archipelago nation, technology players have an advantage in their ease of scaling operations to meet this demand.
Indonesia-headquartered super-app Gojek increased its stake in Bank Jago in December 2020 as part of its bid to accelerate financial inclusion in Asia, while Singapore-based e-commerce and gaming company Sea, which recently won a licence to run a digital bank in Singapore, bought unlisted lender Bank Kesejahteraan Ekonomi in January.