High interest rates continue to be a key strategy for digital banks in Indonesia to attract deposits. Allo Bank Indonesia, part of CT Corp., offers competitive rates such as 6.25% for fixed deposits and 5.25% for savings accounts. Indra Utoyo, the CEO of Allo Bank, states that while high interest rates remain effective, the bank is also focusing on developing unique products like Allo Grow. This product aims to create long-term growth and attract a wider audience. The bank plans to gradually move toward cheaper funding sources.

Meanwhile, Bank Neo Commerce (BNC), part of Akulaku Group, is shifting focus from simply offering high interest rates to attracting low-cost deposits (CASA). Eri Budiono, CEO of BNC, emphasizes the importance of adapting to customer needs. The bank is enhancing its app to provide services such as investment options and daily transaction capabilities. With around 27 million existing customers, BNC seeks to foster long-term relationships by offering an easy-to-use platform.

While high interest rates are appealing, experts warn that they could signal underlying liquidity issues. Arianto Muditomo, a banking expert, advises caution. High rates may indicate that a bank is facing liquidity challenges. He suggests potential customers compare offers carefully and seek financial advice before deciding to invest.

The competition in the digital banking sector is becoming more intense. Many digital banks now offer interest rates between 6% to 8%, much higher than the 3% to 4% offered by traditional banks. However, experts note that rising interest rates could put pressure on the net interest margins of digital banks. Despite these challenges, the competitive environment is driving banks to innovate, improving their credit offerings and operational efficiency.

Looking ahead, Arianto Muditomo believes that while the market will become more competitive, strong, innovative digital banks have promising prospects. Banks that can manage risks well, improve efficiency, and meet customer needs will succeed. Collaborations with fintech companies will also be crucial to enhancing services and competitiveness.

KONTAN