Facing Fierce Competition, Regional Development Banks Can Adopt Community Bank Approach

The Chief Executive of Banking Supervision at Indonesia’s Financial Services Authority (OJK), Dian Ediana Rae, has said that Regional Development Banks (BPD) need to adopt a community bank approach. According to her, this method is relevant for BPDs in attracting customers.

“So it means their closeness with the community will shape the perception that the bank truly deserves them, for the people there,” she said at the Regional Bank Summit 2026, titled “Strategic Transformation of BPDs in Driving National Development”, on Wednesday (5/8/2026).

Under the community bank concept, BPDs can be actively involved in local communities, particularly micro, small and medium enterprises (MSMEs). According to Dian, such an approach fosters a sense of belonging among the public.

“So in facing competition with national banks and others, this approach is important in my view. It is not only about products, but also about what the approach actually is,” Dian explained.

In applying this concept, BPDs can look to national banks, including private ones, as examples. She noted that some banks are able to serve the West Java region on a regional basis.

“For example, in the city of Bandung, they can serve their community in such a way that people feel this is like my own bank,” she said.

Dian added that BPDs usually struggle to compete with larger banks, so each BPD needs its own strengths and unique qualities.

“With an approach that gets closer to customers, one built on a psychological relationship, it will help more. Because if you compete on size with national banks, it will be difficult to achieve no matter how long you try,” she asserted.