Here comes Grab and Kakao-backed Superbank

Written by Kapronasia || June 24 2024

Indonesia has no shortage of digital banks, but it is also a huge market with a significant population that has limited access to formal financial services. It is a key market for Southeast Asian platform companies as well. While Grab has digital banking licenses for Singapore and Malaysia, Indonesia is where it has the best opportunity to prove the skeptics wrong.

Many digital banks in Indonesia are former incumbents that have been re-launched as online lenders by tech giants and Indonesian conglomerates. What makes Superbank unusual is that the consortium that launched it includes both Grab and Kakao Bank, as well as the Indonesian conglomerate Emtek and Singtel. This to us is more interesting than the fact that Superbank can now be accessed directly through Grab’s app – the same has been true of Bank Jago on the GoTo app for several years now.

It is worth noting that Superbank's launch on the Grab app comes as the Singapore-based company rejigs some of its fintech offerings. On June 1, the GrabPay card (launched together with Mastercard in 2019) was discontinued both in physical and digital format. It is unclear why Grab made this decision, though it is now offering a card to Singaporeans for its GXS digital bank instead. Additionally, in September 2023, Grab pulled the plug on its retail investment products AutoInvest and Earn+ because they were deemed to be commercially unviable. We reckon that the leap to wealth management came too soon for Grab, especially in a market like Singapore where there is so much competition. 

For its part, Kakao Bank comes to the Superbank project as one of the most successful digital banks in Asia, having achieved consistent profitability since 2019. Though its share price has fallen about 65% since its November 2021 IPO, that reflects macroeconomic conditions and investors adjusting overly high expectations for the company more than any underlying issues with its business model or earnings. To that end, in the March quarter Kakao Bank posted a record profit of 111.2 billion won (US$81.44 million), up 9% year-on-year. Further, it has experience building a lending business focused on those without exceptional credit while minimizing delinquent loans. Its delinquency rate is just 0.47%.  

Now Kakao is sharing its experience with Superbank, which could give the online lender an edge in an increasingly competitive market. Thus far, Kakao Bank has offered advice on the user interface and user experience of Superbank's mobile banking service for its launch, including ideas for Celengan, the bank's automatic saving service. Celengan was inspired by Kakao Bank’s existing product that allows customers to save small amounts every day automatically with a high interest rate. Superbank is currently offering a 6% annual interest rate on savings.

At the same time, Superbank could play a key role in Kakao’s nascent international expansion.

“Kakao Bank will contribute to Indonesia’s financial technology development through its mobile fintech capabilities and strategic partnership while expanding its business foothold by establishing a global digital bank network,” the Korean bank said in a statement.