Indonesia’s banking landscape is undergoing a quiet transformation, with branch networks shrinking across state-owned, regional, and private banks. According to the Financial Services Authority (OJK), the number of bank branches declined year-on-year as institutions adapt to digital banking trends. While foreign bank branches remain unchanged, the shift signals deeper structural changes in how financial services are delivered nationwide.
Key Facts & Background:
- As of June 2025, total bank branches in Indonesia stood at 23,538 units.
- State-owned banks (BUMN):
- 12,078 branches, down 2.31% YoY from 12,364 in June 2024.
- Regional Development Banks (BPD):
- 3,999 branches, down 1.16% YoY from 4,046.
- Private banks:
- 7,442 branches, down 3.86% YoY from 7,741.
- Foreign banks:
- 19 branches, unchanged since 2023.
- Regions with the steepest declines: Riau, North Sulawesi, West Kalimantan, West Sumatra, and Central Java.
Strategic Insights: The contraction in physical bank branches reflects a broader pivot toward digital banking and cost optimization. As mobile and online platforms gain traction, banks are streamlining operations and reallocating resources to tech infrastructure and customer experience. The sharper decline among private banks suggests competitive pressure to modernize faster, while foreign banks maintain lean, stable footprints. For underserved regions, however, branch closures may risk widening financial access gaps unless offset by inclusive digital solutions. Regulators and banks must collaborate to ensure that digital transformation enhances—not hinders—financial inclusion. Long-term, this trend could reshape workforce needs, real estate strategies, and regulatory frameworks, positioning Indonesia’s banking sector for a more agile, tech-driven future.