ANALYSIS OF DIGITALIZATION TRENDS IN INDONESIA'S BANKING SECTOR: A COMPARATIVE STUDY OF CONVENTIONAL AND DIGITAL BANKS

Abstract

Digital transformation has emerged as a key strategic response within Indonesia's banking sector to address rapid advancements in information and communication technology (ICT), evolving customer behaviors, and intensifying competition from digital banks and fintech companies. This study employs a descriptive qualitative approach using secondary data to compare digitalization strategies between conventional banks (Bank Rakyat Indonesia and Bank Central Asia) and digital banks (Bank Jago and SeaBank). The analysis focuses on mobile banking features, the implementation of Artificial Intelligence (AI), and electronic Know Your Customer (e-KYC) practices. The findings indicate that digital banks are generally more agile in adopting advanced technologies and streamlining customer onboarding. Conversely, conventional banks face limitations due to legacy systems and manual verification processes. The study concludes that successful banking digitalization depends on the integration of technological innovation, organizational readiness, and an in-depth understanding of customer needs and preferences. These insights offer practical implications for banking institutions and regulators aiming to strengthen digital transformation frameworks in the Indonesian banking industry.