In 2021, Indonesia’s financial services regulator paved the way for the rapid expansion of the country’s digital banking sector. Since then, digital banks have expanded in uneven fits and starts. However, with several new entrants in the sector, is Indonesia’s nascent digital banking scene gathering steam?
A digital bank takes deposits and makes loans like any other bank, but the big difference is that it provides these services primarily through an online platform, like an app on your phone, rather than brick-and-mortar branches. Theoretically, digital banks can reach unbanked populations more easily and expand access to formal financial services. They should also have lower overhead because they don’t need to maintain a big physical footprint.
There are basically two types of digital banks. The first kind is when a big commercial bank that already has millions of customers and a large deposit base creates a digital banking app as an addition to its existing services. Some of these have actually been quite revolutionary, like the Jenius app that supercharged growth at Bank BTPN.
The second type of digital bank is more or less built from the ground up. The standard playbook here is that an investor group, usually with the involvement of a tech firm, will buy a very modest-sized Indonesian bank that has been around for decades but only has a few branches. Once acquired, the investor group will start pumping capital into it and rapidly expand the balance sheet.
In Indonesia, the first movers in this space included Bank Jago, Allo Bank, and Bank Neo Commerce. Jago, which has Go-Jek as one of its major shareholders, has been growing the most rapidly. Originally, it was a modest-sized bank founded in Bandung in the 1990s. In 2019, it was taken over by a group of investors that includes Jerry Ng (who helped pioneer the use of the Jenius app at BTPN), Go-Jek, and Singaporean sovereign wealth fund GIC.
In 2020, Bank Jago had roughly $57 million in loans on its books. As of June 2025, that figure had risen to $1.3 billion. And while Jago is not posting big margins, they are slowly moving toward consistent profitability. Given who their backers are, it would be safe to assume growth is the priority over profits at this stage.
Bank Neo and Allo Bank, while still turning modest profits, are facing stiffer headwinds. Neo, which is majority-owned by fintech company Akulaku, has seen its assets shrink year over year after taking significant write-offs. At Allo Bank, backed by e-commerce platform Bukalapak and Indonesian conglomerate Mega Corp, loans grew just .13 percent in the first six months of 2025, while deposits shrunk.
Although Jago looks set to dominate the nascent digital banking scene in Indonesia, there are a few new entrants worth noting. One is Krom Bank, majority-owned by PT FinAccel Indonesia, which is the fintech firm behind Credivo, a buy-now-pay-later app. Krom began life in 1957 as a small local bank in Bandung with just a handful of branches. Following the established playbook, it was acquired by Credivo, and the loan book subsequently jumped from $51 million in 2022 to $242 million in 2024.
But the biggest challenger to Jago is Superbank, which is backed by Indonesian technology and media conglomerate Emtek, along with Grab and Singtel. South Korean digital bank KakaoBank is also involved. Grab is, of course, Go-Jek’s perennial rival in the region, so this is one to keep an eye on. And Superbank is following the same familiar playbook as other digital banks.
It was originally a small bank in Bandung founded in the 1990s, acquired by the above-mentioned investor group between 2021 and 2022, who quickly supercharged the balance sheet. The bank’s total assets rose from $250 million in 2022 to $936 million as of June 2025, including over $500 million in loans. Deposits are rising rapidly as well. Although Superbank has yet to reach profitability, given who the investors are, growth is probably a bigger priority than profits at this stage.
Over the last ten years or so, Southeast Asia has been a hot market for tech firms and start-ups, with huge amounts of capital being poured into the region to back everything from ride-hailing to agri-tech. Many of these promising tech firms have failed to live up to their potential. With strong regulatory support and backing from a variety of deep-pocketed investors and tech firms, digital banks might be one of the final frontiers in the tech boom. It will be interesting to watch these firms develop and scale in real-time and see if this is an industry where tech can actually build something new that is profitable, productive, and lasting.
