Survey predicts 376% rise in Internet banking transactions
Survey predicts 376% rise in Internet banking transactions
The Jakarta Post, Jakarta
The value of bank transactions over the Internet could rise by 376 percent between 2001 and 2004, according to a survey that cited stronger consumer purchasing power in Indonesia would increase the number of online banking customers.
By 2004 the value of transactions could swell to Rp 2.96 trillion (about US$321.73 million) from Rp 621 billion last year, said AMI Business Consulting, which conducted the survey.
"Although Internet banking is relatively new in Indonesia, bankers are optimistic that online banking services will grow fast," said AMI, a division of the consultant firm Asia Marketing Intelligence, in a statement last week.
It said it had surveyed a number of operators and future operators of Internet banking; however, did not mention their names nor say how many it had surveyed.
Online banking services are offered by most of the major banks in Indonesia, with Bank Central Asia (BCA) and Bank Internasional Indonesia (BII) among the leaders.
As of late last year, the number of Internet banking customers stood at 290,000, AMI said, adding, "this number will increase by 45 percent, to 424,000 customers by 2004."
At present the 290,000 account for just 1.79 percent of the banks' total customers; however, bankers were confident of increasing the share to 5 percent by 2004, AMI said.
"The factor that determines the growth in Internet banking is the increase in the standard of living, which will add to the number of Internet users, thereby increasing Internet access," it said.
The promising prospect of online banking comes as Indonesia's economy braces for yet another tough year following the Oct 12 terrorist strike in Bali.
The subsequent plunge in the tourism sector and the longer dry spell in investment, however, means consumers' purchasing power may grow more slowly than expected.
Indeed, the growth in Internet users, after almost doubling every year since 1998, is slowing down under the weight of a sluggish economy.
The Indonesian Internet Service Providers Association predicted a modest increase of Internet users to 5 million from 4.2 million in 2001. Experts have blamed this on a saturated market within the middle-class and students.
Bankers, surveyed by AMI, acknowledged that crucial to the future of Internet banking was the dissemination of information to the public about the existence of the service.
At current levels banks offering online services have yet to reap profits; however, owning the service meant "prestige for a respected bank that always follows developments in the information technology industry," AMI said.
It said that although not profitable as yet, online banking services should be continuously developed by adding new features to meet customer expectations.
About 81 percent of online banking customers use the service to check their account balance, while the remaining 19 percent transfer money or pay bills such as for electricity, telephone or credit cards, according to the survey.
AMI said all banks with online banking products offered payment services over the Internet, with one bank planning to allow customers to pay their credit card bills regardless of bank issuer.
Security concerns, however, continue to impede the growth in Internet banking usage, said AMI. "Bankers themselves realize that they must improve efforts to raise public confidence regarding Internet-based transactions."