The Buzz About NeoBank in Indonesia, How Updated Are You About This One Thing?

Kapanlagi.com - Lately, social media has been buzzing about various financial matters, including investments. With the development of fintech, it has also increased the interest of millennials in learning about it more seriously. The latest addition to the Indonesian financial industry is the presence of NeoBanks.

NeoBank itself has gained serious attention from the players in the Indonesian financial industry. Some say that NeoBank can be a threat to conventional banking, while others say it can be a threat to the fintech industry. So, how updated are you about this one thing?

Opportunities for NeoBank in Indonesia

Actually, the opportunities for NeoBank in Indonesia can be considered quite large. Especially considering the rapid growth of digital service utilization by the public, especially with the conditions of the pandemic since 2020. Responding to this, Frecy Ferry Daswaty, the VP of Marketing at KoinWorks, explains, "Basically, the presence of NeoBank in Indonesia has great potential, especially in supporting the improvement of literacy and financial inclusion in Indonesia, including for SME players."

In addition, compared to seeing it as a threat or competitor, just like with conventional banks, Frecy revealed that they see the potential for collaboration between fintech and other digital financial industries. "With NeoBank, it is certainly very possible to happen, considering that they both operate in the financial field." Moreover, nowadays can be said to be the era of collaboration, so rather than standing alone, it would be better if we can join hands," he added.

The Government's Attitude towards NeoBank

On the other hand, the government through the Financial Services Authority also responded to the presence of NeoBank. Tony, as the Acting Deputy Director of Indonesian Banking Architecture, Department of Banking Research and Regulation, the Financial Services Authority, explained, "Changes in consumer behavior towards financial service products where the pandemic has influenced them to increasingly utilize digital services must be specifically addressed by the banking industry, in order to provide products and services that are in line with their needs through digital transformation."

Tony continued that the government through the Financial Services Authority is also trying to support and evaluate regulations that may hinder. The government will also revisit to make improvements, so that it can better support the current conditions, namely digital economy.

Regulations Related to NeoBank in Indonesia

Meanwhile, looking at the regulations related to NeoBank, which are currently still in the government's drafting process, Nailul Huda, a researcher from INDEF (Institute for Development of Economics and Finance), provides input or recommendations regarding the regulations needed to support the presence of NeoBank in Indonesia.

"We see that in the future, the regulations implemented by the Financial Services Authority must accommodate innovations in terms of funding, technology, etc., which are currently developing rapidly," said Nailul Huda.

INDEF notes that one of the challenges for NeoBank is the rapid pace of technology acceleration, but often not matched by regulations that are still lagging behind. This is often complained by various players in digital financial innovation in Indonesia, so they are often hindered from innovating due to strict regulations in innovation development.

In addition, infrastructure in general is still a challenge for the development of digital financial innovation, including supporting players in this industry. However, the existence of infrastructure can provide access to financial services to more Indonesian people, even in remote areas. The government's development of technology infrastructure such as the internet is seen as very necessary, in order to support literacy and the penetration of the public's awareness of the existence of NeoBank, fintech, and various other digital services.

Not only that, security issues also need to be considered, as NeoBank may exist without having operational branch offices (branchless) and provide full digital services. By doing so, it can prevent trust issues from the public.

In response to this, both the Financial Services Authority and KoinWorks also INDEF agree that security issues, both data security and funds security for prospective NeoBank customers and other digital financial innovations, should be a concern for players, users, government, and other stakeholders. By doing so, the presence of these innovations can grow in a healthy ecosystem and provide benefits for the improvement of financial inclusion in Indonesia.

(kly/tmi)