In The Top Up this week, we look at e-wallet Dana's plans to expand its financial services and examine the launch of Bukalapakâs digibank app. [Read from your browser]( The Top Up ðµ Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If youâre not a subscriber, get access by [registering here](. Written by Jofie Yordan
Journalist Hello {NAME} Nowadays, I use digital money more often than cash. Like a lot of people, I often pay for food, groceries, rides, utility bills, and other daily necessities using an e-wallet. Barring any emergencies, I rarely withdraw cash anymore - maybe only once or twice a month. In Indonesia, digital wallets such as GoPay, Ovo, Dana, and LinkAja have shaped this behavior. Each player has its own distinctive features, which is why I have all of these apps on my phone. Speaking of Dana, the Ant Financial-backed firm [recently raised]( US$250 million in funding from local conglomerate Sinar Mas Group. At the same time, regional ecommerce giant Lazada bought over 4.8 million of Dana shares from Emtek, an existing investor, worth US$304.5 million. With the fresh funds, Dana plans to roll out additional financial services to reach more consumers, particularly the countryâs unbanked and underbanked population. Financial services such as lending, insurance, and wealth management are widely believed to be the next phase of growth for e-wallet players. At the same time, having new investors will open more opportunities for Dana to collaborate and widen its ecosystem. Sinar Mas, for instance, is active in sectors including property, telecommunications, insurance, banking, and lending. And while Dana has not shared specifics, a pay-later service or lending products for SMEs on Lazada is also a possibility. I delve into Danaâs plan and how Sinar Mas and Lazada can help the fintech company realize its ambitions in one of this weekâs Big Stories. In the second story, my colleague Simon assesses the potential of two newly launched Singapore digital banks, GXS and Trust. And for our Hot Take, I look into the latest digital banking app from Bukalapak and Standard Chartered in Indonesia. Read on! â Jofie
 --------------------------------------------------------------- THE BIG STORIES 1ï¸â£Â [Lazada-backed Dana finds new momentum as it looks beyond payments]( The Indonesian e-wallet plans to expand its financial services with lending, insurance, and wealth management for its next phase of growth. 2ï¸â£Â [Sizing up GXS and Trust, Singaporeâs newly-launched digital banks](
Grab-Singtelâs GXS and StanChart-FairPriceâs Trust stress their independence from shareholders, but theyâll ultimately need the support to succeed.
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--------------------------------------------------------------- THE HOT TAKE  Can Bukalapak thrive in Indonesiaâs heated digital banking war? Hereâs what happened: - Last week, Indonesian ecommerce player Bukalapak launched BukaTabungan, a [digital banking app]( developed in collaboration with Standard Chartered Bank.
- The app leverages a banking-as-a-service solution by Standard Chartered called Nexus.
- As part of its launch, BukaTabungan is offering a bonus interest rate of up to 7% on savings. Hereâs our take: Bukalapak, the newest entrant into Indonesiaâs digital banking scene, has made the competition in that space even tougher. Already, several notable names have made a dent in this sector: Gojek-linked Bank Jago, Bank Neo Commerce, Jenius, Sea Group's SeaBank, DBS' Digibank, and United Overseas Bank's TMRW. We outlined the tech companies [bankrolling]( Indonesiaâs digital banks in a previous story. Like SeaBank when it launched, BukaTabungan is initially focusing on savings features. The app, which is currently only available on the Google Play Store, does not offer time deposit for now. Bukalapak users can easily open a BukaTabungan account and set it as a payment option within the app. This is similar to what [Gojek and Bank Jago]( have done. The difference is that BukaTabungan users can also withdraw money at Mitra Bukalapak merchants and some minimarkets across Indonesia. By offering high interest rates to draw new users, BukaTabungan is following in the footsteps of other digital banks. At 7%, BukaTabungan's bonus savings interest rate is higher than SeaBankâs and Bank Neo Commerceâs current interest rates of 6%. In a statement, Bukalapak said this interest offer will be valid only until the end of October. But there is a possibility that it will be extended if BukaTabungan still needs a boost to get new users. Other digital bank players have also adopted this strategy. High interest rates are indeed considered a quick way to acquire many new users. Bank Neo Commerce, for instance, gained [14.6 million users]( about a year after its launch. SeaBank managed to attract 800,000 users in less than a year as well. Bank Neo Commerce [believes]( that offering high interest rates to increase its user base, grow transactions, and collect more âcheapâ capital will ultimately drive profitability, Tjandra Gunawan, president director of Bank Neo Commerce, told local media previously. âWe can start to lend more money through direct lending, which will increase our net interest margin (NIM),â said Gunawan. Gunawanâs prediction is already playing out. In Q2 2022, Bank Neo Commerce recorded around [US$34.1 million]( in interest income, an over 3x jump compared to the same period last year. This brought the company towards profitability for the period, posting US$400,000 in operating profit in June. One of Bank Neo Commerceâs main growth engines has been a digital lending feature, which almost doubled the volume of loans disbursed. Such an approach, however, may not be for everyone. At 3% to 4%, Bank Jagoâs interest rates on time deposits is [on par]( with the average traditional bank in Indonesia. In December, the company introduced a promotion rate of 7% for new users who sign up with GoPay. However, Bank Jago said the high interest rate has not made a [big impact on its growth](. Notably, Bank Jago recorded its [first profitable year]( in seven years in 2021, with a net profit after tax of around US$6 million. Even so, the rapid growth in the company also occurred in the loan disbursements sector. For BukaTabungan, offering a high interest rate for an extended period may be detrimental in the long run, given that profitability will be the main focus for publicly listed Bukalapak. Instead, the digital bank could take advantage of the Bukalapakâs ecommerce ecosystem, which spans 110 million users, 6.8 million online merchants, and 14.2 million offline businesses, including warungs in Mitra Bukalapakâs network. In the future, Bukalapak can also target MSMEs on its platform, a segment that still lacks access to formal financing. Thanks to Mitra Bukalapakâ strong presence in lower-tier cities, the firm can introduce these MSMEs to BukaTabungan. Of course, Bukalapak could also benefit from Standard Chartered's banking experience to provide seamless services. Standard Chartered recently teamed up with FairPrice Group to launch a [digital bank in Singapore]( called Trust. Itâs worth noting that Bukalapak also owns an [11.5% stake]( in Indonesia-based Allo Bank, opening up potential collaborations in the future. That said, Bukalapak has told Tech in Asia that its role is solely as an investor in the digital bank - for now, at least. â Jofie
 --------------------------------------------------------------- NEWS YOU SHOULD KNOW Check out Tech in Asiaâs coverage of the fintech scene [here](. 1ï¸â£Â [SCB, FairPriceâs Trust digibank launches in Singapore]( The digital bankâs offerings at launch include credit card services, a savings account, and family personal accident insurance. 2ï¸â£Â [Ex-Grab, Stripe execâs credit scoring firm bags $2.2m pre-seed money]( Founded in October 2021, SkorLife helps individuals check their credit scores from Indonesiaâs bureaus for free. 3ï¸â£Â [SG-based Xfers rebrands to Fazz Business]( This comes after Xfers and Payfazz jointly formed a new entity called Fazz Financial Group in March 2021. 4ï¸â£Â [India raids payment firms over alleged misconduct and breaches by Chinese apps]( The move is part of an ongoing probe by the countryâs anti-money laundering agency into the reported wrongdoing of lending apps backed by Chinese nationals. 5ï¸â£Â [Thailand tightens rules on crypto advertising]( Operators have 30 days to comply with the new rules, which include outlining investment risks clearly in advertisements.
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