Bank Jago wants to bolster the country's Sharia banking segment, with assets only accounting for 6.5% of the total banking industry’s assets.
Jakarta: Indonesian digital bank Bank Jago has launched Jago Syariah, an application that promises to provide Sharia digital banking products.
Bank Jago President-Director Kharim Siregar called the app “a life centric financial solution,” which makes financial management simple, collaborative and innovative. Speaking during a virtual press conference, he added that the app, which was launched on February 22, would encourage the Sharia segment’s growth.
“Digitisation will improve service quality for the customers while deepening our market share. We believe the presence of Sharia banking applications will have positive impacts in boosting the Sharia economy’s contribution to the national economy as a whole,” Siregar said.
The app’s features include wadiah contract and integration with various digital ecosystems, including Gojek, GoPay and Bibit with technology that is as advanced as that of the conventional Jago app, P2P transfer, e-wallet top up and bill pay. It also includes Islamic social finance (zakat, awqaf, sadaqah and infaq) and the ability to share accounts with family or friends.
The app also offers several benefits over the conventional Jago app, including Sharia-compliant transactions, Sharia contract, zero administration fee offering mudharabah deposit with profit sharing and a seamless experience for account opening from an ecosystem partner or omnichannel app.
Despite having a population of over 230 million Muslims, Indonesia’s Sharia banking products and services have yet to become the main preference in terms of financial services, lagging behind conventional banks’ products and services.
According to the statistics published by the Financial Services Authority (OJK) as of November 2021, Sharia banking assets reached 646 trillion rupiah ($45 billion) or only 6.5% of the total banking industry’s assets of 9,913.7 trillion rupiah ($697 billion). Meanwhile Sharia banks’ third-party funds amounted to just 512.8 trillion rupiah ($35 billion) or 7% of the industry’s 7,323.4 trillion rupiah ($488 billion).
Siregar said Bank Jago observed customers’ high demand toward Sharia banking services since the launch of its Jago app in April 2021. There are three major challenges, he said: low literacy of Sharia banking, low product variety in Sharia banking and limited Sharia banking services.
“We noticed that people want Sharia banking products and services which are reliable with a quality that is on par with those of conventional banks, especially in terms of technology and transaction features. With Jago Syariah’s life-centric design and functions, which include unique collaborative features, the customers will be one step ahead in achieving their needs,” Siregar added.
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