Deep Dive: Does the rise of digibanks threaten Indonesia’s online lending industry?

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As digital banking rises to prominence in Indonesia, tech companies from various sectors have been dipping their toes in the game, partnering with and sometimes even acquiring digibanks.

Photo credit: Bank Jago

Leveraging their greater and easier access to capital, online and peer-to-peer lenders have also joined the fray. However, some question whether this move toward the digital banking space might spell doom for the lending scene.

Will digibanks soon render online lenders obsolete?  Or is there room for coexistence in the future? On this episode of Deep Dive, Tech in Asia journalist Budi Sutrisno discusses what lies ahead for Indonesia’s online lending scene.

Timecodes:

00:00 – Intro music
00:47 – Today’s topic: Will digibanks render Indonesia’s online lenders obsolete?
01:24 – Why online lenders began partnering with digital banks
02:53 – How this phenomenon changes the way online lenders operate
04:19 – Is there room for coexistence?
06:36 – The different ways that online lenders have entered the digibank scene
08:08 – Acquisitions vs. partnerships – which approach is better?
09:04 – The challenges online lenders face when they play the digibank game
10:28 – The “winning formula” to entering the digital banking space
12:27 – Why online lenders will always be around
14:03 – The future of online lending and digibanking

Featured reporters:

• Budi Sutrisno, a Tech in Asia journalist based in Jakarta

Essential reading:

• Why Indonesia’s tech giants find digital banks irresistible
• As digibanks rise, will Indonesia’s online lenders become obsolete?
• The tech companies bankrolling Indonesia’s digital banks

Episode Transcript:

Nathaniel Fetalvero (VO):
Hello and welcome to Deep Dive, a show where we discuss the biggest headlines to hit the startup scene with the journalists who broke the stories.