CIMB Niaga leverages digital banking for growth

CIMB Niaga benefits from the growing Indonesian economy, driven by domestic consumption that accounts for 50% of the economy. The bank leverages the favourable demographic and gross domestic product growth of the country to ensure sustainable profitability. The expanding middle class in Indonesia has contributed to the bank’s customers growth as well.

However, the key factor contributing to CIMB Niaga’s strong performance is its loan-to-deposit ratio that remains at a stable 61% to 62%. Similarly, the bank maintains a balanced current account-savings account (CASA) ratio. Despite a significant increase of approximately 225 basis points in the interest rate set by Bank Indonesia,  CIMB Niaga has chosen a more moderate approach in adjusting its rates compared to the market.

According to Budiman Tanjung, chief of network and digital banking, more affluent customers are purchasing bonds or mutual funds through OCTO, the bank’s next-generation mobile banking app. This digital capability enhances online banking, offering customers a seamless and efficient experience, including access to lower foreign exchange rates.

To stay competitive against digital challengers, CIMB Niaga builds its own digital banking platform user interface/user experience (UI/UX). Tanjung added that the bank aspires to become the premier financial app for digital banking in Indonesia by offering comprehensive UI/UX features. This strategic focus on digital transformation is expected to drive growth in digital customer onboarding, enabling the bank to compete with major banks like BCA and other state owned banks.

The bank’s increasing digital capabilities led to the closure of several branches in Jakarta. In big cities such as Jakarta and Surabaya, Tanjung noted that there was an increasing number of customers transacting on the OCTO platform. Expansion plans will continue in new areas of the country to tap the corporate, commercial, and emerging business banking segments.

The bank serves its customers through omni-channels across Indonesia. This has proven to be cost-effective for the bank. Further, chatbots enable staff to focus on revenue-generating services rather than support functions.

Tanjung says that CIMB Niaga has found its “sweet spot”, the best of both worlds with the perks of a digital bank blended with the trust and familiarity of a traditional bank.