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What is Digital Bank: Definition, Advantages, Disadvantages, and List of Indonesian Digital Banks

Check out the discussion related to the definition, types of services, advantages, disadvantages, and this list of digital banks in Indonesia

In this era of technology literacy, there are many transaction services that are digital. Today, we can find trading saham online, payment of taxes online, and so forth. Digital transaction services will not only make transactions easier, but also provide time efficiency for consumers.

One of the digital transactions that is currently developing is a digital bank. You may already be quite familiar with some digital products from banks such as mobile banking, transfers online, and withdrawals via ATM. However, did you know that there are fully digital banking services? Digital banks offer a variety of products and services completely electronically, even account registration can be carried out online online

What exactly is a digital bank? What services can be performed with a digital bank? What are the advantages of using digital bank services when compared to conventional banks? Check out this discussion related to the definition, types of services, advantages, disadvantages, and a list of digital banks in Indonesia!

What is Digital Bank?

Illustration of a digital bank customer making a transaction | Usplash

A digital bank is a bank that provides and conducts its business activities through electronic channels. A digital bank is an Indonesian Legal Entity (BHI) organization that can run its business activities without a physical office (other than the head office) or only using a limited physical office. Digital banking, apart from being a new bank, can also be an old bank that is transforming into a digital bank.

Reporting from Finder.com, Indonesia has the second largest percentage of adults who have digital bank accounts after Brazil. In 2021, 25% of adults in Indonesia already have a digital bank account and this is expected to continue to increase in the following years. This proves that digital banks are currently gaining popularity in Indonesia. 

Types of Digital Bank Service

Illustration of digital bank customer | Pexels

What are the services that can be done with digital banks? The following are some services that you can do when you become a digital bank customer.

Account Opening and Closing Administration Process

When using conventional bank products, we usually have to open an account and close an account by coming directly to the nearest branch office of the bank. If you want to open a digital bank account, the process of opening and closing an account book can be done entirely online or online online through the bank's official platform.

The documents that prospective customers need to prepare are more or less an ID card number and NPWP (if you have one) which will later be processed.upload on the digital banking system. Furthermore, prospective customers just have to wait for the verification process which usually takes a few days and is also completely done automatically online. The initial deposit from opening a bank account can be carried out using the features e-banking. Don't forget to always make sure that you register with the official website or application of the digital bank that you want to create an account for!

Transaction Online

As with service m-banking nor i-banking from banks in general, digital banks have various features to facilitate online transactions. Digital banking applies the principles of self-service so that customers can carry out transactions related to their financial activities without being present Plate or customer service. Transaction features online These include transfers between banks, paying bills – such as electricity and water – online, transferring funds to digital wallets, and so on.

Financial Management

Another interesting feature that you can get if you use a digital bank is the management of financial posts where customers will be given recommendations for the allocation of expenses that customers have. This feature can be tailored to the needs of the customer. In addition, digital banks record all transactions made by customers, so customers can check income and expenses regularly.

Customers do not need to do Update account book to find out the flow of cash in and out with the existence of a digital bank.

Financial Product Services

Digital banking services also provide the opportunity for customers to enjoy banking products in general. Digital bank products that customers can enjoy include savings, deposits, loans or credit, insurance, investments, and transactions E-commerce.

Advantages of Using Digital Bank

Illustration of digital bank customer transacting | Pexels

Digital banks provide many benefits for their customers, especially for customers who do not have time to go to the bank. The following are the advantages or benefits that can be obtained from using digital banks.

Transaction Ease and Speed

One of the main advantages or benefits of using digital banks is the ease of transactions that can be carried out by customers. Customers can make transactions financial just by facing the screen device and internet network only. 

Time efficiency

In addition to easy access, digital banks also offer time efficiency for their customers. Customers do not need to come directly to the bank to make transactions, even for crucial processes such as account opening. Customers and prospective customers just need to access the official digital bank platform for transactions.

The Level of Security Is Growing

The risk that bank customers may fear the most is the risk of account burglary by irresponsible parties. Today, the level of security of digital bank products has increased. Customers often don't just need to enter a number Personal Identification Number (PIN) only. Customers may need to enter fingerprint or code information One Time Password (OTP) when performing the login process or digital transactions. That way, the security of customer financial transactions is increasingly guaranteed.

Save Transaction Fees

All transactions offered by digital banks can be entirely done online. For this reason, customers do not need to come directly to the nearest bank branch office. To come to a commercial bank branch office, customers will usually need a fee. With digital transactions by digital banking, customers can save on transaction costs, especially the cost of going to the bank.

Disadvantages of Using Digital Bank

Illustration of using Unsplash digital bank

An alternative in life if it has a positive side and a negative side. Here are the disadvantages of digital banks that you may need to know.

Dependence on Internet Network

In digitally transacting using digital banks, customers must have an internet network. If the customer does not have an internet network, then he or she cannot access or make financial transactions through the digital bank application. In fact, just to check the balance, customers need an internet network to be able to carry out transactions.

Security and Liquidation Risk

The security network of today's banking applications may be highly developed, but the same applies to fraudulent modes. Fraudsters can do a variety of ways to get what they want. For example, the fraudster makes a call accompanied by a acting, Email containing Phishing, and fraudulent messages.

Fraud activities can certainly be prevented by reading more financial literacy. Always remember not to share OTP and PIN codes with others especially for strangers. In addition to security risks, digital banks also have the risk of the possibility that the bank may be liquidated.

Even so, this is one of the rare things because financial institutions are one of the institutions that are supervised by the government. For that, don't worry if you want to keep using digital bank products!

List of Digital Banks in Indonesia

Digital banks in Indonesia have recently emerged. Not only digital banks, customers from banks with full business processes through digital transactions are also increasing. Digital banks are in great demand by the public because of their ease of access and transactions. The following is digital bank list which operates and is most in demand by Indonesian customers.

Well, that was a discussion related to digital banking. Digital banks offer convenience for customers who want to make practical financial transactions. Is there a digital bank whose product you want to try? If so, what is it?

Image source header:Pixabay

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