JakartaPost-July 3, 2023
Amid fiercer competition in Indonesia’s retail banking sector, global lenders have been changing their strategy, including by selling retail portfolios, finding new customers through tech platforms and channeling funds through peer-to-peer (P2P) apps and multifinance firms. Analysts believe the role of conventional retail banks will shrink as their products are increasingly replaced by new ones that leverage novel technologies. However, some customer segments that value human interaction will still need traditional banking solutions. In January 2022, Citi announced it would be selling its retail banking and credit card business in Indonesia and other Southeast Asian countries to Singaporean lender UOB for US$3.6 billion. In April 2023 another global bank, Standard Chartered, disclosed a plan to sell its retail loan portfolio in Indonesia to Bank Danamon, a local subsidiary of Japanese banking giant MUFG Bank, in a transaction that would include transferring Standard Chartered’s conventional credit card, personal loan, mortgage and auto loan portfolios. However, neither bank is kissing goodbye to the country’s retail banking sector. Citi disbursed Rp 275 billion ($18.2 million) in ESG (environmental, social and governance) funds to multifinance firm Home Credit in December last year. Meanwhile, Standard Chartered channels loans through fintech companies Kredit Pintar and Kredivo. Those moves point in the same direction as MUFG’s recent decision to acquire another Indonesian multifinance firm, Mandala Finance, adding to the bank’s existing consumer loan portfolios of Adira Finance and Home Credit. All are aimed at reaching Indonesian consumers without an extensive local presence. Read more at: https://www.thejakartapost.com/paper/2023/07/03/after-recent-portfolio-sell-offs-is-traditional-retail-banking-dead-in-ndonesia.html.
