How Seabank, Bank Jago are beating digibank players to the punch

Shopee’s digibank Seabank fired the first shot with its 7% interest on savings. Rival bank Jago quickly matched it, but the two top dogs’ aggressive moves may end up blocking the road ahead for the rest of the players

Since Indonesia began awarding licences, over a dozen digibanks have popped up, chasing the dream of a fully integrated banking and digital platform ecosystem.

But Seabank and Bank Jago stand out, offering attractive savings interest rates. The young digibanks have also booked profits

The two, however, have deep pockets and an enormous e-commerce flywheel at their disposal, thanks to Shopee and GoTo, that others don’t have

But they can’t depend on the flywheel forever—the two will have to move beyond small-ticket loans. But lending to merchants is a difficult proposition

The social media accounts of Indonesia’s new digital banks are abuzz with promotional messages these days. Get IDR 25,000 (US$1.7) for referring a friend! Win IDR 50,000 (US$3.4) cashback for signing up for a new feature! Receive an IDR 110,000 (US$7.5) bonus just for opening a new account!

Allo Bank, one of the sector’s latest entrants, even hosted a music festival to build out its image. Thanks to the popularity of the headlining K-Pop bands, the festival’s ticket-sales platform immediately gave out under high demand. A PR nightmare for Allo.

Two of the largest digibanks in the space, Seabank and Bank Jago, seem to have a much more practical, and perhaps more enticing, ace up their sleeves—high interest rates.

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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