BRI Agro: ‘big bank’, not ‘big tech’ writes Indonesia's digital bank playbook

State-owned banking giant BRI is leaving it to its rural bank subdivision, BRI Agro, to lead digital transformation. An audacious plan, especially with big tech leading the charge everywhere else. But if it works out, it could form a brand new underbanked-focused digital banking order

BRI Agro, a conventional bank for the agribusiness sector, believes its ecosystem of fintech partners will help it transform into a digital-only play with a unique positioning

It helps BRI Agro’s case that, in Indonesia, digital-native challengers have had to take over conventional banks, which means they start on more equal footing

In other parts of the world, conventional banks haven’t seen much success with launching digital banking apps. It’s big tech, not big bank, who has the upper hand

With huge investor interest in the second-and-third-tier-city narrative on its side, BRI Agro has a shot at success. As long as its fintech partners don’t outgrow its ambitions

At IDR 520 trillion (US$35.8 billion) Bank Rakyat Indonesia (BRI) is Indonesia’s second-most valuable business by market capitalisation. It is also the only bank to have taken a step towards digitisation via its agricultural subdivision, BRI Agro.

While its contemporaries, Bank Central Asia (BCA) and Bank Mandiri, are launching digital banking apps from under their main roof, BRI’s decision to turn a 32-year-old BRI Agro into a digital bank is unusual to say the least. It announced the change in May.

Like all conventional banks, BRI, too, has come face-to-face with a potentially disruptive, new digitisation wave.

AUTHOR

Nadine Freischlad

Nadine is based in Indonesia. She covers Southeast Asia's super apps, the changing nature of work and employment, and other structural shifts happening as a result of digital disruption.

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