Hijra Bank Inaugurates Presence, Transforms Into Digital BPRS

PT BPRS Hijra ALAMI (Hijra Bank), a subsidiary of the ALAMI Group, officially opened its public presence through the launch of the application yesterday (06/12). Bank Hijra is the first digital credit bank (BPR) in Indonesia from the non-commercial bank group.

The application launch took place in Jakarta, attended by ALAMI Group Co-Founder & CEO Dima Djani; Head of Regional 1 Financial Services Authority (OJK) Office, DKI Jakarta & Banten, Roberto Akyuwen; Director of the Department of Economics and Sharia Finance of Bank Indonesia Ita Rulina; and Sharia Economics and Finance Expert Mulya Siregar.

In his presentation, Dima said that the official launch of Bank Hijra would take time at least two years since officially acquired. Not only preparation for product development, but also socialization and licensing from Bank Indonesia and OJK as fully regulated financial service institutions.

"We want to comply with the provisions because the rules from the regulator are made with the aim of protecting the community. And we are good for the long term, maybe there will be tens or hundreds of years so you have to make the right foundation, but the process is not fast," he said.

Meanwhile, Roberto said, OJK as a regulator continues to encourage banks to carry out digital transformation in order to meet customer needs. This is in harmony with the embodiment of The roadmap banking development 2021-2025 in Indonesia which wants BPRs and BPRS to grow healthily, sustainably, and make a more tangible contribution to the economy and society.

According to him, when the pandemic entered the recovery phase, the challenge for the banking industry in general was to generate demand. Even though the business is still going strong, without demand from the financing side and placing DPK (third party funds) in the end the business will be constrained.

“Therefore, various innovative efforts are needed so that BPRs are ready to run fast. For people who understand the banking industry, what Bank Hijra is doing today is a very extraordinary fundamental achievement, in the context of BPR and BPRS. I hope that Bank Hijra can continue to answer challenges by continuing to grow steadily, enthusiasm is maintained, and the desire to innovate should not stop so that it can create even higher competitiveness in the future," said Roberto.

Sharia Economics and Finance Expert Mulya E Siregar explained in transforming BPR towards go digital it takes a long time so it really needs the alignment of the regulator. Both the OJK and Bank Indonesia have finally issued various stimuli to pave the way for BPR/S to go digital.

"There are more regulations now market friendly. With dynamic regulation and customer experience oriented ultimately accelerating banking innovation, including Bank Hijra," said Mulya.

Hijra Bank Products

Dima continued, by becoming a Digital BPRS, Bank Hijra could serve a wider community compared to conventional BPRS. BPR/S have more limited services than commercial banks. This type of bank may not provide current account services and foreign exchange transactions, and may not open branches outside its territory depending on the level of capital.

However, with digitalization, BPRS can expand services so that the resulting impact is also wider. "By becoming a digital bank, we don't need branches in every province in Indonesia, we only need one head office, but we can serve the wider community. With digital, we can now onboard just passing by gadgets," Dimas said.

Bank Hijra will focus on working on the urban segment of young Muslims around 25-35 years old who are already married or newly married. However, basically Hijra Bank products are intended for everyone, even non-Muslims.

The first product is savings. To attract customers to place their savings as DPK, the company makes a special strategy by providing different propositions. Banking wants to invite customers on a good mission. One of them is by presenting the Alms Sign Up feature, which is the alms of light program as an invitation to the public to share kindness with funds subsidized by banks.

Then, Wadi'ah Savings, Transfers, Hijra Boxes to help customers manage finances more carefully according to their goals. For example, to save, umroh, or pilgrimage. Customers can routinely top up balance into these boxes until the target fund is met. Finally, Hijra Lifestyle, which presents scientific study sessions from experts on interesting and useful topics, such as parenting, home life, and mental health.

"So far, there are many Islamic financial products in Indonesia, but literacy is lacking. We are not only introducing the product but also strengthening the literacy side with educational features."

This approach, supported by other innovations being prepared by the team, is expected to boost DPK growth, especially from individual customers. As for the initial stage, banks still rely on funds from corporations to place their funds in Bank Hijra.

"When focus only on consumers can get a large DPK. Because there is a new demographic, namely digital natives who cannot be approached 100% by big banks. We also have a difference. When individual deposits skyrocket, so cost of funds we are increasingly competitive from other banks.”

Then from the productive financing side, banking will enter something different from ALAMI, namely productive financing with collateral. This is a realm that previously could not be entered by lending players. Then, cooperate with other banking institutions to conduct channeling.