Bank Danamon's Strategy Remains Relevant to Fintech Developments

Sector fintech in Indonesia continues to show a rapid growth trend every year. According to projections from Google, Temasek, and Bain & Company, Indonesia is predicted to become the largest digital payments market in Southeast Asia by projection Gross Transaction Value reach $760 billion by 2030.

At the same time, the government encourages use fintech to achieve the financial inclusion target of 90% this year. This passion makes many parties compete to adopt it fintech updated so that it is more relevant to current developments. This was also done by Bank Danamon.

In a joint interview DailySocial.id, Chief Strategy Officer of Bank Danamon Reza Iskandar Sardjono said that the company has taken various internal and external strategies to continue to support the industry fintech this.

“One of them is by placing funds in Garuda Fund together with MUFG and MUIP (MUFG Innovation Partners), a venture fund that makes strategic investments in Indonesia's digital financial sector, with an emphasis on fintech companies," he said.

For the record, the Garuda Fund announced in January 2023 that it had a fund allocation of $100 million with an investment period starting from 2023-2028. Garuda Fund's investment focus is series A funding and above, with an average investment of $5 million with the strategic aim of increasing Danamon's collaborative business with digital and fintech players in Indonesia.

The newest startup to receive funding from the Garuda Fund is a startup insurtech Qoala who participated in series C round announced on April 3 2024. It is targeted that as many as 15 startups will receive funding from the Garuda Fund by 2028.

In February, Bank Danamon also announced a strategic partnership with helicopter, a Singaporean startup focused on connecting global investors with private debt opportunities in Southeast Asia. The company's goal is to fill the $500 billion financing gap that banks cannot serve and deploy capital to the 300 million unbanked through 1.000 originators in the region.

“Through this collaboration, Helicap is introducing an ecosystem fintech those in Indonesia to Danamon. On the other hand, Danamon provides the Danamon corporate portal (Danamon Cash Connect), and helps with management flow of funds smoothly with better risk control for Helicap," continued Reza.

He also said that this collaboration was quite unique because it helped provide convenience for Helicap in carrying out funding operations, as well as providing security in carrying out transactions. It is possible that in the future, this collaboration will continue with entities within the MUFG Group, namely Adira Finance and Home credit.

Digital transformation

Reza continued, internal strengthening by investing in IT & Digital Infrastructure, Human Resources, Branding, and Branch Network to remain relevant while also improving service to customers.

The Company seeks to increase channel capabilities, both physical (Next Generation Branch) and digital (D-Bank PRO and Danamon Cash Connect), as well as expanding digital partnerships. D-Bank PRO is a solution for consumers, while Danamon Cash Connect is aimed at business customers.

Through this digitalization, Reza claims that his party has succeeded in increasing HR productivity in branches by migrating administrative transactions (PIN changes, debit card changes, and updating customer data) to digital channels (D-Bank PRO) and self-service channels (Digital CS).

Meanwhile, for customers, digitalization provides easy access to transactions to meet daily needs, such as: bill payments, top ups, buying/selling foreign currency, QRIS, changing credit card transactions into installments (My Own Installment), filing loan and purchase wealth management products, and various other features.

The company also actively provides BaaS (Bank-as-a-Service) services to customers in all segments through developing and improving various API services. “In the future, we are committed to continuing to develop all digital channels with principles customer centricity as well as strengthening synergies with the MUFG network so that it can provide comprehensive services to customers."

He reasoned that this step was taken because the company is a customer-centric organization, so one of its strategies is to continue to engage with customers and understand their needs. “With direct interaction through various event or through research to understand changes in customer behavior focusing on various digital banking services," he concluded.