DIGIVESTASI - The shine of digital banks is gradually fading as players continue to lose money. So what are the opportunities and challenges for digital banks to make money or profit in 2024? Based on financial reports, some digital banks are able to make profits at least until October 2023.

PT Bank Jago Tbk (ARTO), for example, made a profit of Rp 53.9 billion in October 2023, up 21.8% year-on-year. Another digital bank, PT Bank Raya Indonesia Tbk (AGRO), also recorded a profit of Rp 17.8 billion, an increase of 118.2% compared to the same period last year. However, some digital banks still recorded losses, including PT Bank Neo Commerce Tbk (BBYB) with a net loss of Rp 548.5 billion and PT Bank Aladin Syariah (BANK) with a net loss of Rp 157.4 billion in the third quarter of 2023.

Trioksa Siahaan, Senior Vice President of the Indonesian Banking Development Institute (LPPI), said that next year digital banks will face several challenges in generating or maintaining profits. "Next year, banking competition will be tighter. Maybe new banks haven't emerged yet, but there will be many banks being acquired, merged, or consolidated," he told Bisnis last week.

Furthermore, he revealed that another challenge that will be faced is the economy that has not fully recovered. At that time, banking liquidity conditions are still tight. "This will encourage digital banks to compete for cheap capital," he said. Bank Raya Head of Corporate Risk Management, Compliance and Human Resources Danar Widyantoro said Bank Raya also sees several challenges that will be faced by banks in maintaining profitability next year.

"Risk management is a challenge," he said during a visit to the editorial office of Bisnis Indonesia, Tuesday (December 12, 2023). According to him, for digital banks, risk management is needed because services such as credit are provided through digital platforms. Raya Bank also continues to strive to maintain asset quality, including its credit rating technology.

Digital banks strive to generate profits

Chairman and Director of Bank Aladin Syariah Dyota Marsudi said that in 2023 Bank Aladin Syariah still recorded losses. However, many achievements were made by BANK which had a positive impact on the company's performance. "This is indicated by the increasing number of registered users and the collection of DPK [third party funds] which continues to increase. In addition, Bank Aladin Syariah's financial resources also continue to increase with the quality of assets that are maintained very well." . in a written statement last October (October 31, 2023).

While BBYB is still reporting losses, it is still actively developing a number of digital services to increase revenue.  Bank Neo Commerce also continues to establish partnerships with various ecosystems because this is the key to accelerating business in the digitalization era, said Aditya Windarwo, Pj Chairman and CEO of Bank Neo.

In particular, BBYB collaborates with Luna POS, a cash register service provider and accounting software to manage commercial activities such as restaurants or cafes. To strengthen its operations, BBYB is conducting a capital increase with pre-registration rights (PMHMETD) or capital increase of 5 billion shares until the end of this year.

The implementation target is set for the fourth quarter of 2024. Aditya said the rights issue was carried out to strengthen the company's capital structure, operational development, and information technology development. According to him, as a digital service provider bank, BBYB is committed to continuing to provide wider and more comprehensive digital banking services to various segments of Indonesian society. "This is part of BNC's efforts to continue to adapt to business developments and support sustainable business expansion by maintaining healthy and strong competitiveness," he said.