Indonesia presents a compelling case for digital-first banking growth. As the world’s fourth most populous nation, it boasts a large, young, and increasingly tech-savvy demographic. Indonesia’s digital banking evolution is being shaped not just by demographics, but by a clear consumer shift toward value, ease, and experience. With 73% of users citing seamless onboarding and nearly half prioritizing intuitive interfaces, digital-first banks are redefining what customers expect from financial services. As trust in these platforms rises—especially among younger users—they’re increasingly seen as the preferred choice for daily transactions and future financial products.
1. Indonesia’s Digital First Banking Boom
In the next 5 years, Indonesia is expected to add ~13Mn first-time bank account holders – digital first banks stand to benefit from the digital first userbase!
Indonesia’s banking sector is at an inflection point. Approximately 40% of the population is young adults and students who are digital natives, so they are drawn to high-quality digital banking options as they seek their first bank accounts. Over the next five years, around 13Mn Indonesians are expected to open accounts, primarily through digital channels. While traditional banks offer digitized services, digital-first banks with superior digital products for younger demographics are positioned to benefit. This shift is expected to substantially increase customer deposits in digital-first banks, a trend already visible in the 33% deposit growth observed within listed digital-first banks between 2021 and 2023.
2. Convenience and Value Drive Digital Adoption
Coming of Age of Digital First Banks, as they closely align their offerings with consumer needs! How about incumbents?
Indonesian consumers are increasingly prioritizing convenience and value in their banking choices, leading them to digital-first banks. This trend began with attractive rates (53%) drawing users in, and the ease of onboarding (73%) significantly reduced friction. A superior user interface (UI) experience [49%] made the offerings more engaging, and these apps became the primary choice for daily payments, further supported by rewards and promotions [46%].
Looking ahead, these users intend to increase their engagement with digital-first banks and are increasingly seeking investment and credit solutions—a sign that these banks are coming of age!
3. David vs Goliath Moment
Trust was the main moat of traditional banks, but digital-first banks have been eating away at it
Trust, once a stronghold of traditional banks, is now being challenged by digital-first alternatives. A significant portion of customers find digital-first banks trustworthy, especially among younger cohorts aged 19-29. This growing trust is reflected in the increasing comfort in storing large amounts of money in digital-first banks. While a notable percentage still prefer traditional banks for large sums, the trend indicates a gradual shift in consumer confidence toward digital platforms, driven by higher interest rates and positive experiences.
That being said, we did note that having an offline presence significantly aids in consumer trust!
4. A little dress up will go a long way
With delta on consumer trust decaying, traditional banks need to improve their digital offerings else could face significant challenges
Ultimately, traditional banks possess an unmatched scale, and they are indeed digital, with approximately 93% of users utilizing their bank’s app. However, complex user interfaces and frequent app crashes hinder the user experience. Consequently, this impacts regular app usage, leading consumers to prefer neobanks for daily transactions and creating an opportunity for them to capture market share.
Redseer’s Capabilities
Indonesia’s banking story is still being written – we can help you be a protagonist!
Indonesia’s digital banking story is still being written—but it’s clear that momentum is shifting. As digital-first banks evolve beyond basic services and gain the trust of younger users, they’re well-positioned to become the go-to platforms for everyday finance. For traditional players, the message is clear: adapt quickly or risk irrelevance in a market that’s increasingly mobile-first, experience-driven, and trust-sensitive.
