Analyst Note: The "Neobank" hype cycle of 2020-2022—where any app with a colorful debit card raised at 20x Book Value—is definitively over. The market has bifurcated into two clear winners: Ecosystem Banks (embedded in Super Apps like Gojek and Shopee) and Digital Incumbents (BCA, Mandiri). This report analyzes the death of the standalone digital bank, the new battle for "Low-Cost Funds" (CASA), and presents verified financial data from Q3-2025.
Key Findings: The State of the War (Updated Q3-2025)
- /// CAC is Destiny: Standalone digital banks pay $15-$20+ to acquire a customer via traditional marketing. Ecosystem banks (Jago, SeaBank) achieve near-zero CAC by converting existing Gojek/Shopee users through in-app integration.
- /// The Lending Trap: Collecting deposits is easy (offer 6-7% interest). Lending safely to Indonesia's 98 million unbanked adults is incredibly hard. Digital banks heavily rely on "channeling" via P2P platforms—a model now under regulatory scrutiny.
- /// The King Stays King: BCA serves 41+ million customer accounts and remains the "Payroll Account" of the Indonesian middle class. Its digital infrastructure makes it a de facto tech company.
- /// P2P Reckoning: Institutional investors (banks, multifinance, pension funds, insurers) provide 88%+ of P2P lending capital. With NPLs spiking at troubled platforms (Investree at 16%, Tanifund at 60%), regulators are tightening channeling rules.
- /// Profitability Divergence: SeaBank posted IDR 378.8B profit in 2024 (+57% YoY). Bank Jago hit IDR 199B through Q3-2025 (+132% YoY). Allo Bank stagnated at IDR 467B (+5% YoY) despite massive ecosystem backing.
01. Market Context: Indonesia's Financial Inclusion Gap
Indonesia presents the perfect storm for digital banking: the fourth-largest unbanked population in the world (~98 million adults as of 2021 World Bank data), combined with 273+ million people spread across 17,000 islands, and smartphone penetration exceeding 79%.
The government's National Survey on Financial Literacy and Inclusion (SNLIK) 2024 found the financial inclusion index at 75.02%, with financial literacy at 65.43%. While this represents massive progress from 49% inclusion in 2014, it also means roughly 70 million adults remain outside the formal banking system—a market that every digital bank is racing to capture.
The opportunity is clear: digital banking transactions hit IDR 5,570.49 trillion in May 2024 alone, growing 10.82% year-on-year. The frequency of digital banking usage jumped 158% between 2018 and 2023. By 2026, approximately 75 million Indonesians (39% of the population) are projected to actively use digital banking services.
02. The Three Models of Digital Banking
Not all digital banks are created equal. We classify them into three distinct strategic buckets, each with fundamentally different unit economics and survival prospects.
1. The Ecosystem Bank (The Winners)
Examples: Bank Jago (GoTo/Gojek), SeaBank (Sea/Shopee), Allo Bank (CT Corp/Bukalapak/Grab)
Strategy: Embedded Finance. They don't advertise—they exist as a seamless payment layer inside Super Apps with hundreds of millions of users.
Competitive Moat: Transaction data exhaust. Jago knows your GoRide commute patterns; SeaBank knows your Shopee purchase history. This data powers credit scoring for the "thin file" population that traditional banks cannot underwrite.
- • Bank Jago: 18.6M customers (Q3-2025), IDR 23.9T deposits, IDR 199B profit YTD
- • SeaBank: 17M users (Dec 2024), IDR 26.7T deposits, IDR 378.8B profit FY2024
- • Allo Bank: ~2.35M users, IDR 467.1B profit FY2024 (+5.07% YoY, stagnating loan growth)
2. The Digital Incumbent (The Fortress)
Examples: BCA (BCA Mobile + Blu), Mandiri (Livin'), BRI (BRImo)
Strategy: Retention and Migration. Move the massive physical user base to mobile while launching a separate digital-only subsidiary (Blu) to capture Gen Z.
Competitive Moat: Trust and Payroll. Indonesians keep their life savings in BCA because "it will never fail." According to a 2023 survey, 55% of Gen Y use BCA Mobile as their primary digital bank. They might use neobanks for "Jajan" (spending money), but the salary account stays with the incumbents.
- • 41+ million customer accounts (early 2025)
- • BCA Digital (Blu): 2.4M users, IDR 11.7T deposits, IDR 107.9B profit FY2024 (+134.5% YoY)
- • Average Blu account balance: ~IDR 5 million (high spending power demographic)
3. The Standalone Neobank (The Strugglers)
Examples: Bank Neo Commerce (BNC), pre-ecosystem Aladin, various independent digital banks
Strategy: Aggressive Promos. Offer 6-7%+ interest rates on deposits (vs. ~3% at traditional banks) to attract "rate shoppers." Heavy marketing spend on influencers and cashback campaigns.
Fatal Weakness: High Cost of Funds and Zero Stickiness. Users are mercenaries—they chase the highest rate and leave the moment the promo ends. This creates a vicious cycle: high deposit costs → need to lend at even higher rates → higher NPLs → more provisioning → shrinking margins.
- • After years of losses, BNC achieved ROE of 18.51% and ROA of 3.61% in Q1-2025
- • NPL improved from 3.88% (Jun 2024) to 3.10% (Jun 2025)
- • Backed by Akulaku ecosystem, pivoting toward ecosystem integration
03. The "Primary Account" Problem: Why CASA is Everything
The holy grail of banking is becoming the Payroll Account—where the salary lands every month. The primary account holder enjoys: (1) lowest-cost funding (CASA deposits at near-zero interest), (2) highest engagement, and (3) cross-sell opportunities for credit, insurance, and investments.
Most Indonesians practice "Multi-Banking": they receive their salary in BCA/Mandiri/BRI (Safe/Trusted), then transfer small amounts to SeaBank/Jago/Blu (Convenient/Promos/High Interest). This behavior is rational but devastating for digital banks' unit economics.
"I keep 90% of my money in BCA. I top-up my GoPay/Jago only when I need to order food or pay a bill. The rest just sits in my BCA account earning 0.5% interest—but I trust it."
Implication:- • Digital banks get expensive Time Deposits (users chasing 6%+ rates)
- • They struggle to get cheap CASA (current/savings accounts)
- • Cost of Funds stays high, compressing Net Interest Margins
"I linked Jago to Gojek. Now I don't need to top-up—it just pulls directly from my Jago account. I keep a float of IDR 2-3 million there."
Implication:- • Seamless integration creates "sticky float" deposits
- • These deposits are functionally CASA (transactional, low-yield expectation)
- • Bank Jago's CASA ratio: 54% of deposits (Q1-2025)
CASA Composition Comparison (Latest Data)
| Bank | Total Deposits | CASA Ratio | TD Ratio | Implication |
|---|---|---|---|---|
| Bank Jago | IDR 21.4T (Q1-25) | 54% | 46% | Healthy—ecosystem working |
| SeaBank | IDR 26.7T (FY24) | ~50%* | ~50%* | Strong Shopee integration |
| Blu by BCA | IDR 11.7T (FY24) | N/A | N/A | Gen Z focus, high avg balance |
*Estimated based on product mix. TD = Time Deposits. CASA = Current Account + Savings Account.
04. The Lending Crisis: Channeling, NPLs, and Regulatory Crackdown
Banks die if they cannot lend. You cannot pay depositors 6% interest if you're just sitting on the cash—you must lend it out at 12%+ to earn a spread. But digital banks face a fundamental problem: they lack the physical branches to verify borrowers in Indonesia's vast rural areas, and they lack the credit history data for the unbanked population.
Their solution? Channeling—wiring capital to P2P lending platforms (fintech lenders) that have the distribution and risk appetite to reach borrowers that banks cannot.
The "Channeling" Mechanism Explained
Has excess deposits. Lower risk appetite. Seeks yield.
Has borrowers. Higher risk tolerance. Charges 24-36%+ APR.
Pays effective rates of 30%+ annually. Often thin-file.
The Systemic Risk: As of 2024, institutional lenders (banks, multifinance companies, pension funds, insurers) provide 88%+ of total P2P lending capital, with banks and digital banks dominating this flow. POJK 40/2024 caps any single lender at 25% of a platform’s outstanding loans at month-end; OJK-supervised financial institutions (incl. banks) may fund up to 75%. When P2P platforms experience credit deterioration—as they did throughout 2024—the losses flow directly back to institutional balance sheets.
⚠️ P2P Lending Sector: 2024-2025 Reckoning
- Investree: CEO terminated January 2024 amid alleged misconduct. NPL ratio hit 16%, license revoked October 2024.
- Tanifund: NPL ratio of 60%. License revoked May 2024 for failing minimum equity requirements.
- iGrow: Facing lawsuit from 40 retail lenders claiming $33.4M in losses—despite being owned by state-backed LinkAja.
- Industry-wide: Outstanding P2P loans reached IDR 80 trillion (~$5B) by March 2025. Only 97 licensed platforms remain (down from 149 in 2020). OJK has blocked 8,271 illegal platforms.
Regulatory Response (POJK 40/2024): Effective December 2024, P2P platforms must maintain minimum equity of IDR 12.5B by July 2025, keep NPL below 5%, and cap consumer loan rates at 0.3% per day (declining to 0.1% by 2026).
NPL Performance Comparison
Up from 0.3% in H1-2025, still well below industry average.
Well-managed. Shopee ecosystem provides transaction data for scoring.
Improved from 3.88% in Jun 2024. Cleanup in progress.
05. Regulatory Framework: OJK's Consolidation Mandate
The Financial Services Authority (OJK) has aggressively shaped the digital banking landscape through capital requirements, ownership rules, and licensing frameworks.
Banks were required to achieve IDR 3 Trillion (~$200M) in core capital by end of 2022. This forced a wave of M&A, rights issues, and consolidation.
- • Banks failing to comply face degradation to BPR (Rural Bank) status—limiting services
- • As of January 2024, 11 regional development banks (BPDs) had not yet met requirements
- • New digital banks face even higher bar: IDR 10 Trillion to establish from scratch
Indonesia offers the most liberal foreign ownership regime in ASEAN for banks—up to 99% foreign ownership is permitted (vs. 30% in Malaysia, restricted in Thailand/Singapore).
- • Single shareholder limits: 40% (financial institutions), 30% (non-financial corporates), 20% (individuals)
- • Foreign controlling shareholders must commit to supporting Indonesian economic development
- • This attracted Korean (Kookmin, Hana), Japanese (MUFG), and regional tech capital (Sea, GoTo)
- • Note: A draft banking bill proposes reducing the foreign limit to 40%—watch this space
OJK formalized the "digital bank" category—banks that operate purely digitally without physical branches (except one head office).
- • Two pathways: (1) Establish new entity, or (2) Transform existing conventional bank
- • Must demonstrate adequate risk management, data security, and IT-competent directors
- • Foreign bank branches cannot operate as digital banks in Indonesia
- • De facto moratorium on new banking licenses—acquisition of existing small banks is the only entry path
06. Deep Dive: Bank Jago (ARTO) — The Ecosystem Blueprint
Bank Jago is the blueprint for ecosystem banking done right. Before GoTo entered, it was a tiny bank in Bandung called Bank Artos—acquired and transformed into the "financial plumbing" of Indonesia's largest tech ecosystem.
Bank Jago: Key Metrics Trajectory
| Metric | 2023 | 2024 | Q3-2025 | YoY Growth |
|---|---|---|---|---|
| Total Customers | - | 15.3M | 18.6M | +32% |
| Jago App Users | 8.1M | 12.1M | 14.5M | +49% |
| Third-Party Funds (DPK) | IDR 12.1T | IDR 18.8T | IDR 23.9T | +41% |
| Loans Outstanding | IDR 13.0T | IDR 17.7T | IDR 23.5T | +34% |
| Net Profit (YTD) | IDR 72B | IDR 129B | IDR 199B | +132% |
| Gross NPL | - | 0.2% | 0.4% | +0.2pp YoY |
Jago doesn't want to be a "banking app." It wants to be invisible financial infrastructure—the plumbing behind other apps.
- • Investing? Jago powers Bibit (robo-advisor integration)
- • Ride-hailing? Jago powers Gojek (GoPay integration)
- • Stock trading? Jago powers Stockbit (trading account)
- • New in 2025: Direct app-based lending (moving beyond channeling)
Jago achieved millions of users with nearly zero traditional marketing spend. It leverages partner network effects.
- • CAR remains robust at 32.9% (Q3-2025)—plenty of room to grow
- • LDR at 98%—healthy balance of deposits and lending
- • Management explicitly notes: "Collaboration with ecosystem partners remains a major contributor"
- • Now diversifying with direct lending products to reduce partner dependency
07. Deep Dive: SeaBank — The E-Commerce Finance Machine
SeaBank Indonesia is the banking arm of Sea Limited (NYSE: SE), parent of Shopee. It transformed PT Bank Kesejahteraan Ekonomi (Bank BKE) into a digital-first lender targeting the "underserved and unbanked."
SeaBank: The Profitability Leader
SeaBank's secret weapon is Shopee integration. By promoting SeaBank during Shopee's mega-sale days (9.9, 11.11, 12.12), they acquire customers at near-zero incremental cost. The mobile-first app works on low-cost smartphones, offers daily interest crediting with no minimum balance, and provides free interbank transfers—removing friction that traditional banks impose.
SeaBank achieved profitability in just 18 months after rebranding from Bank BKE in 2021—a feat nearly unimaginable in greenfield digital banking. It has now posted three consecutive years of profit (2022: IDR 269.2B, 2023: IDR 241.4B, 2024: IDR 378.8B).
08. The Challengers: Allo Bank, BNC, and Others
Allo Bank (BBHI) — The "Ecosystem-on-Paper" Problem
Backed by CT Corp, Bukalapak (11.49%), Grab (2.07%), Salim Group, Traveloka, and Carro. Raised IDR 4.8T in 2022 rights issue. Should be a winner... but isn't.
- • Profit declining: IDR 302.59B in 9M2024, down 10.69% YoY
- • Stock collapse: Down 91.48% from ATH of IDR 8,100 (Jan 2022) to ~IDR 690 (Jan 2025)
- • Problem: Too many ecosystem partners, not enough integration depth. Bukalapak struggling. Grab less dominant in Indonesia than in Singapore.
- • Lesson: Ecosystem banking requires monopoly-like platform dominance (Shopee) or deep vertical integration (GoTo/Jago), not just financial investors.
Bank Neo Commerce (BNC/BBYB) — The Turnaround Story
Formerly Bank Yudha Bakti, transformed in 2020. Now backed by Akulaku Group (P2P/BNPL ecosystem).
- • Profitability achieved: ROE of 18.51%, ROA of 3.61% (Q1-2025)
- • NPL improving: From 3.88% (Jun 2024) to 3.10% (Jun 2025)
- • Strategy shift: Moving from standalone promo-driven model toward Akulaku ecosystem integration
- • Watch: Can it sustain profitability without rate wars?
Blu by BCA Digital — The Premium Niche
BCA's Gen Z play. Launched 2021. Benefits from BCA trust halo.
- • Users: 2.4 million (FY2024, +35% YoY)
- • Deposits: IDR 11.7T (+30.7% YoY)
- • Profit: IDR 107.9B (+134.5% YoY)
- • Differentiator: High average balance (~IDR 5M per account) indicates affluent young users, not rate-chasers
- • 2024 move: Garuda Indonesia co-branded debit card—targeting travel-oriented millennials
09. Investment Thesis: What to Watch
✓ Bullish Signals
- • Profitability inflection: Jago, SeaBank, BNC, Blu all hitting positive territory—proving unit economics can work
- • NPL discipline: Leaders maintaining sub-2% NPLs despite macro headwinds
- • CASA improvement: Jago at 54% CASA indicates sticky deposits, not rate-chasing
- • Regulatory clarity: OJK rules are strict but clear—serious players know the playbook
- • Inclusion runway: Still 70M+ unbanked adults to capture
⚠ Bearish Concerns
- • P2P contagion: 60% of P2P funding from banks. If NPL crisis deepens, balance sheets at risk
- • Channeling crackdown: OJK moving to limit bank → P2P flows. What's the alternative lending model?
- • BCA fortress: Incumbents aren't standing still. BCA's AI/data advantage is "virtually insurmountable"
- • Foreign ownership politics: Draft bill to cut foreign limit to 40% could trigger forced selling
- • Stock price disconnect: Allo Bank down 91%+ from highs despite ecosystem backing
10. Data Appendix: Financial Performance Summary
| Bank | Ecosystem | Users | Deposits | Loans | Net Profit | NPL | CAR |
|---|---|---|---|---|---|---|---|
| Bank Jago | GoTo/Bibit | 18.6M | IDR 23.9T | IDR 23.5T | IDR 199B | 0.4% | 32.9% |
| SeaBank | Shopee/Sea | 17M | IDR 26.7T | IDR 22.4T | IDR 378.8B | 1.74% | 30.8% |
| Allo Bank | CT Corp/Buka | ~2.4M | N/A | IDR 7.37T | IDR 467.1B | N/A | N/A |
| BNC | Akulaku | N/A | IDR 13.1T | IDR 8.9T | IDR 464B** | 2.92% | 35.8% |
| Blu (BCA) | BCA Group | 2.4M | IDR 11.7T | IDR 6.5T | IDR 107.9B | N/A | N/A |
Data as of latest available: Q3-2025 for Jago, FY2024 for SeaBank/Blu, 9M2024 for Allo. *Declining YoY. **H1-2025.
The Verdict
"The era of the 'Independent Digital Bank' is dead. In Indonesia, you are either an Incumbent Giant (BCA/Mandiri/BRI) with unassailable trust and payroll dominance, or you are a Feature Inside a Super App (Jago in Gojek, SeaBank in Shopee). There is no sustainable middle ground."
The winners—Jago and SeaBank—have proven that embedded finance can achieve profitability at scale. The strugglers—standalone neobanks burning cash on rate wars and influencer marketing—face an existential question: find an ecosystem to integrate with, or fade away.
Sources: Bank Jago Press Releases (Q1-Q3 2025), SeaBank Indonesia Annual Report 2024, OJK Official Data, BCA Digital Public Statements, IDN Financials, The Jakarta Post, Tempo.co, Oxford Business Group, World Bank Global Findex, Chambers Practice Guides, Asian Banker. All data verified as of December 2025.