Universitas Gadjah Mada
Faculty of Economics and Business

Payment system technology, both from banking and non-banking products, is growing rapidly and is leading to full implementation of digital services. Various culinary shops or transportation and expedition services, have started to offer payment systems with the application of digital technology that promises efficiency in terms of time and security to create transaction convenience. Along with this increase, digital financial system applications or what is more commonly called financial technology (fintech) are currently competing to offer convenience and completeness of features to meet millennial financial needs in an all-digital era. In fact, fintech is predicted to become a bank competitor and become a financial future that will fill the millennial days amidst many increasingly tech-savvy societies. The rapid development of fintech cannot be avoided, banks are required to always innovate in terms of digital services so that they are not eroded by the development of fintech.

According to the FEB UGM Lecturer who currently serves as Vice Dean for Finance, Asset and Human Resource of FEB UGM, Kusdhianto Setiawan, Sivilekonom., Ph.D. He said that currently banks are starting to invest heavily in digital services.

"Investing a lot in digital platforms requires a shift from using ATMs to digital services, a few days ago we heard an announcement from one of the Himbara banks that they would close dozens of branch offices. I think it is part of them to try (switch) using digital services. , although not completely, ”explained Kusdhianto.

According to him, the current millennial generation is no longer doing financial transactions with the old way. This is due to the complete facilities offered by fintech products, making it easier for users to complete their financial transactions that are not necessarily available in transactions through Automated Teller Machines (ATMs).

"If we look at the millennial generation, for example, I think they no longer use banking services in the old way, they have even become customers of digital banking services. In terms of innovation it is also more possible through digital platforms," said Kusdhianto.

"For ATMs, the menu will be difficult to develop again, while the digital platform can be connected with various things. For example, a savings account that has digital services can (be used) for investment, insurance, and so on, which in the past could not have been served through ATMs or branch offices, "he added.

This explanation contains facts, as evidenced by the 2015 Bank Indonesia data, the retail payment system is still dominated by banks. However, at the end of 2019, the payment system began to be dominated by fintech products with the first order being OVO at 20%, Gopay at 19%, and Dana at 10%.

Moreover, in the midst of the Covid-19 Pandemic conditions where there were various social restrictions, Kusdhianto explained that this indirectly educated the public to become familiar with using fintech as a means of digital transactions. He gave an example of an issue that is currently being discussed regarding the imposition of fees for cross-ATM transactions using ATM Bersama.

"Himbara, which previously totally free to take money at an ATM Bersama which is different from the debit bank for savings, and now it is not free, I suspect it because they want to educate and provide incentives to consumers to switch into digital banking services" he explained.

"At this time we also observe, transfers using online banking are actually cheaper than via ATM. I think in recent times, such as BRI with BRImo, Mandiri with Mandiri Livin, and so on(it is actually cheaper), "he added.

According to him, this policy is motivated by the digital banking investment that banks make must be immediately used by their consumers so that charging transaction fees through ATMs is part of educating the market to switch to digital banking services.

Reportage: Sony Budiarso/Kirana Lalita Pristy

Source: Antara News, link