Indonesian lender Bank Central Asia (BCA) is reportedly planning to invest $200m into its one-month-old digital unit Blu to tackle competition from big tech companies.

BCA, which is the country’s biggest lender by market value, will mobilise the funds to help Blu expand its footprint in the country ahead of an initial public offering (IPO) in two years, BCA president director Jahja Setiaatmadja told Bloomberg in an interview.

BCA plans to increase Blu’s capital four-fold from $69.37m to $278m, which currently has around 110,000 customers.

BCA’s announcement comes shortly after the country’s Financial Services Authority (OJK) revised banking regulations to encourage lenders to speed up digital transformation.

Last month, Southeast Asian mobile on-demand services and payments platform Gojek joined forces with Indonesia-listed Bank Jago, which is the first fully digital bank in Indonesia.

The partnership followed Gojek’s investment in Bank Jago last year.

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By GlobalData

Sea Group, which recently received a digital banking license in Singapore, acquired Indonesian lender Bank Kesejahteraan Ekonomi (Bank BKE) in February this year.

Sea Group plans to transform Bank BKE into a digital entity.

In other Asian digital banking news, last week, the central bank of the Philippines announced that it has decided not to accept digital banking license applications from 1 September 2021.

The number of digital lenders in the Philippines will be capped at seven for the next three years.

Currently, GOtymeUNObank, UnionDigital Bank, Overseas Filipino Bank and Tonik Bank have been licensed by the Bangko Sentral to operate as digital lenders.