By Annetta Gunawan & Agnes YovitaIn recent years, digital banking in Indonesia has grown rapidly—especially among Millennials and Gen Z. Thanks to the pandemic pushing everything online, banking has followed suit. Now, opening an account, making transfers, or even closing one can all be done from a smartphone. It seems like the perfect match for today’s tech-savvy generation.

But here’s the twist: even though sign-ups for digital banks are rising, most users aren’t keeping much of their money in them. Why?

That’s the question researchers Annetta Gunawan, Agnes Yovita, and Brian Garda Muchardie set out to answer. Their study, using the Push-Pull-Mooring (PPM) model, dug into the real reasons behind switching—or not switching—to digital banks.

Push, Pull, and… Mooring?

Let’s break this down. The PPM model is often used to explain why people switch from one service to another:

  • Push factors: What’s pushing users away from conventional banks?

  • Pull factors: What’s pulling them toward digital banks?

  • Mooring factors: What personal habits or mindsets are holding them back?

Push Isn’t the Problem

Surprisingly, the study found that push factors weren’t all that influential. Things like high fees or boring promotions from traditional banks weren’t enough to make people pack up and leave. In other words, conventional banks aren’t doing anything bad enough to lose young customers.

Promos Don’t Work Either?

Even more unexpected: all those shiny digital bank promotions—like referral codes or cashback deals—aren’t doing much either. While these may get people to download an app or sign up, they’re not creating lasting relationships.

So, What Does Work?

Now we’re getting to the good stuff. The research revealed several pull factors that do make a difference:

  • Low cost: Fee-free transactions and better rates are huge for young, budget-conscious users.

  • Lifestyle compatibility: Users are more likely to stick with a bank that fits their digital habits and values.

  • Alternative appeal: If a digital bank feels simpler, faster, or cooler than a traditional one, it stands out.

  • Peer influence: This was the biggest game-changer. Friends and family heavily influence someone’s decision to try a digital bank. A recommendation from a trusted source is far more powerful than any ad.

What’s Holding Them Back?

That’s where mooring factors come in. People who aren’t used to trying new things or who rarely switch banks tend to stick with what they know. For these users, loyalty—or maybe just habit—keeps them in the conventional banking world, even if digital banks are more convenient.

What Digital Banks Can Learn

So, what should digital banks take away from all this?

First, it’s time to move beyond gimmicks. Instead of chasing sign-ups with flashy deals, focus on building real trust. Encourage happy users to share their experiences online—especially on platforms where Gen Z and Millennials spend their time. A thoughtful referral from a friend is worth more than a thousand banner ads.

Second, make digital banking feel different in a good way. Offer unique features that actually solve problems—like better interest rates, easier budgeting tools, or ultra-simple app interfaces.

The Future of Banking Is Personal

Young Indonesians aren’t switching banks because they’re fed up. And they’re not staying for the discounts. They’re making decisions based on what feels right for them—banks that understand their needs, match their values, and come recommended by people they trust.

In the race for the future of banking, going digital isn’t enough. To win over the next generation, banks need to go deeper: they need to go personal.