Indonesian Banks & Financial Institutions: Being The Best Is Not Enough

In the digital era, competition and entry barriers are thinning and are almost disappearing or changing shape.

The banking and financial institutions, which were relatively low in competition, suddenly jumped into digital market and faced perfect competition.

In this kind of market, "winner takes all." There is no room for the second rank. The entry barrier, which initially needed significant capital, like abundant branches, modern systems, and the best features, suddenly became less relevant to new entrants.

The entry barrier is gone or mostly turned into a network effect. It defines the competition.

What if we still rely on the "best value proposition"?

Digital Services from Large Incumbent

Incumbent companies certainly have a powerful value proposition relative to competitors in their era. For example, Bank A is the best bank in the mortgage market. Bank B has the best service in the corporate market.

While bank C has the best service in the Islamic market. Financial Institution X has the best service in car loans. Financial Institution Y has the best service in pawn credit. At the same time, Financial Institution Z has the best service in microcredit. And so on.

However, if the best performers are compared with their…