Digital Banking on the Rise: Thousands of Branch Offices Shut Down

A significant shift is underway in Indonesia’s banking landscape. Advancements in digital innovation are not only transforming how people access financial services, but also prompting banks to restructure their operations—including reevaluating the need for physical branches.

According to data from the Financial Services Authority (OJK), as of March 2025, the total number of commercial bank branches in Indonesia had dropped to 21,035 units, down by over 3,200 branches compared to the previous year.

Dian Ediana Rae, Chief Executive of Banking Supervision at OJK, explained that this decline reflects how the banking sector is adjusting to shifting customer behavior. More and more customers are now turning to digital services for faster, more convenient access.

“Digitalization is not just about innovation—it’s about operational efficiency,” said Dian. “A leaner operation is now a necessity.”

The reduction in branch offices has inevitably raised concerns about employment. However, OJK assured that no mass layoffs have occurred so far, as banks have implemented proactive measures such as employee retraining and job reallocation.

One example is CIMB Niaga. Over the past five years, the bank has gradually adjusted its branch network. By March 2025, its branch count had decreased to 397 units, many of which have been converted into hybrid branches or relocated to more strategic areas.

Lani Darmawan, President Director of CIMB Niaga, emphasized that the focus has shifted from expansion to optimization—strengthening digital ecosystems and maintaining service quality through careful human resource planning.

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The banking industry offers a clear example that digital transformation is not merely a trend—it’s a necessity. Streamlining structures, leveraging technology, and maintaining service quality are essential to staying relevant in today’s fast-paced world.

Satra Sinar Abadi Group