Articles

Evaluation of Digital Banking Efficiency in Indonesian Banking Sector using Data Envelopment Analysis (DEA) Approach

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The digital banking industry in Indonesia has experienced significant growth, driven by changing customer demands, technological advancements, and regulatory support. The digitalization of Indonesian banks aims to enhance cost efficiency. This research utilizes the Data Envelopment Analysis (DEA) method to measure the cost efficiency of Indonesian commercial banks. The research includes digital banks as business units and neo-banks, comparing their cost efficiency from 2012 to 2020, with digital banks and neo-banks generally operating more efficiently than non-digital banks. The findings highlight the significant impact of digital transformation on cost efficiency in the banking industry. Stakeholders, including banks and financial authorities, can utilize these insights to plan strategies, reduce operating costs, and enhance cost efficiency. Further research can explore additional factors, such as macroeconomic influences, and categorize commercial banks based on their core capital categories.

Proposed Customer Acquisition Strategy for Mobile Banking Application

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Digital technology has produced numerous benefits and simplified workers. Nonetheless, this exponential growth in digital technology has increased competition, significantly impacting the finance industry. This significant development in banking presented a vast opportunity that had to be carefully analysed and managed, resulting in intense competition among digital banking products such as mobile banking services, which have helped macro, micro, and small enterprises in Indonesia gain access to more convenient financial services. A regional bank owned one of Indonesia’s provinces, launched a successful mobile banking app with revolutionary features that made transaction easier. The bank updated their mobile app in 2022 as part of their ongoing implementation change from a focus on products to one on customers. In response to user feedback, the new version enhances consumer experience in terms of UI UX and other factors. However, once a market-leading application ranked among the top 10 digital banking products in Indonesia, the mobile banking is presently experiencing a decline in the number of app activations and is being replaced by competitors. Additionally, the bank has difficulty measuring the mobile banking’s digital marketing campaigns. Beginning with an internal and external analysis, a customer acquisition strategy was proposed for mobile banking services product utilizing the RACE planning framework and a digital marketing implementation strategy.