Bank Jago to Expand Business in 2022, Advancing Integration with Gojek

Following its strategic partnership with Gojek, PT Bank Jago Tbk (IDX: ARTO) will continue the integration of its second service ecosystem in 2022. A series of use cases have been prepared, such as the GoPay and Jago e-KYC processes and payment for merchant transactions from Kantong Jago via GoPay.

As stated by Bank Jago's President Director, Karim Siregar, currently his team is preparing to launch GoPay integration as one of the Kantong in the Jago application. Kantong GoPay is estimated to be coming soon.

Karim is reluctant to elaborate on this integration plan with Gojek after the merger with Tokopedia (GoTo). However, he ensured that he would continue to develop the Jago application in order to serve the retail, MSME, and mass market segments.

Synergy plans with Gojek / Bank Jago

"This year we are focusing on strengthening the product and user foundations. The number of Bank Jago users is now close to 700 thousand," he said during Bank Jago's business presentation, Thursday (28/10). The Bank Jago application has been downloaded more than 1 million on Android devices.

In general note, Gojek Group through GoPay (PT Dompet Anak Karya Bangsa) grabs 22% of Bank Jago's shares. After the GoTo merger, Bank Jago is exploring wider synergies as it enters the large ecosystem of services owned by Gojek and Tokopedia.

Digital sharia and payment partnership

In other plans, Bank Jago also targets digital sharia services to be available in the Jago application in the first quarter of 2022. Currently, the Sharia Business Unit has started its operation, just waiting for the realization of digital services. His team is waiting for permission from the Financial Services Authority (OJK).

"Sharia and conventional [financial] services are always identified differently, even though they are not. Moreover, there are no fully digital Islamic financial services in Indonesia," he added.

Jago Syariah will offer digital financial solutions that focus on customer life (life centric) by optimizing the latest technology, equivalent to conventional Jago applications.

Referring to data from the Financial Services Authority (OJK), the market share of Islamic banks was only 6.33% as of October 2020. The increase was not too significant compared to the market share in 2017 which was only 5%.

Furthermore, Bank Jago also plans to strengthen the digital ecosystem by encouraging service partnerships, especially for lending. In total, Bank Jago has collaborated with 19 partners from various verticals, ranging from e-commerce, lending, and investment.

Currently, all of Bank Jago's financing is being channeled through a loan channeling model with third parties, either through financial service companies or P2P lending platforms.

Bank Jago service ecosystem / Source: Bank Jago

"Banks live on interest, therefore, we should not focus on transactional [products], but also on credit or financing," he said.

Based on the third quarter 2021 financial report, Bank Jago has disbursed Rp3,727 trillion, an increase of 502% from the same period last year which amounted to Rp619 billion. Most of these loans are distributed through loan channeling.

In a previous interview, Karim had revealed that he would target MSMEs as the target market for financing. In 2020, the number of MSME players in Indonesia is estimated to reach more than 65 million which recorded to contribute more than 50% of Indonesia's GDP, and absorb 97% of the active work budget in Indonesia.

–Original article is in Indonesian, translated by Kristin Siagian