Bank Mandiri The Digital Era of Banking Industry PDF [PDF]

Citation preview

The Impact of Digital Era in the Banking Industry



International Seminar Encountering Digital Era of Banking Operation August 2019



1 Digital Economy is the Future



Every Industrial Revolution always has an Impact on the Characteristics of Products and Labour



TIMELINE



1969 1784 INDUSTRY 1.0 Mechanization, Steam Machine, Weaving Machine



1870 INDUSTRY 2.0 Mass Production, Assembly Line, Electrical



Effect on Product



Effect on Labour



INDUSTRY 3.0 Automation & Computerization, Flexible Manufacturing System



Now INDUSTRY 4.0 The Internet of Things, Smart Industry, Cyber Physical System



Fast Produced



Affordable



Mass Customization



Personalized



Occupation changes from rough/manual workers to semi skilled workers working in Industry



The number of trained workers dominates employment



Most of the workers have secondary and higher education



Cyber workers (fluent in technology) will be excellent in every company



e-Conomy in Southeast Asia (Google & Temasek, e-Conomy SEA 2018)



$102B E-COMMERCE



$239B



±40%



ONLINE TRAVEL



Contributed From



Indonesia



CHATTING PLATFORM



$78B



RIDE HAILING



$23B



$72B



$30B $8B



$29B



$11B



2018



$30B



Total 2018



2025



Total 2025



Digital Economy in Indonesia UND ERLYING D RI VERS



D I GI TAL MARKET SI ZE 1)



TECH CO MPANIES



(USD B)



>260M



Social Media



Population



>133M Active Internet Users



58% Smartphone Users



4 Hours per Day Avg. Use of Internet



~1.2% GDP



~13.0x



Infrastructure Development



Declining Telco Data Price



Affordable Smartphone



~6.4% GDP



160



12 2017



2027E



Note: 1) based on market size of e-money, e-travel, and e-commerce as proxy Source: McKinsey, Morgan Stanley



Accelerated growth presents abundant opportunities



Accelerated growth presents abundant opportunities



The growth of Indonesian internet users is increasing rapidly, and internet penetration is estimated to reach more than 50% by 2020



We live in an interesting time, where technology availability and market readiness are ripe for changes, particularly in Indonesia



Source: McKinsey 2016



Entering the era of Industry 4.0, Indonesia also has a tendency towards Digital Behaviour



Population 265,4



mn Urbanization 56% Population growth 1,1% yoy GDP/Capita $11,632



Mobile phone users 177,9



mn Mobile phone penetration ratio 67% Mobile phone user growth 1% yoy Source: BPS, United Nations, Internet World Stats



Median age 30,5



yo Number of labours 131,5 mn (49%) Number of millennial 63,3 mn (24%)



Social media users 130



mn Social media penetration ratio 49% Social media user growth 23% yoy



Internet users 132,7



mn Internet penetration ratio 50% Internet users growth 0% yoy



Average usage time in one day: Internet 8 hour



51 min Social media 3 hour 23 min



2 Banking Industry in Digital Economy



Digital transformation is a must for the banking industry “Banking is not somewhere you go, it’s something you do.” Brett King-Author of Bank 4.0



Source: DBS Bank



“We see ourselves as a technology company with a banks license.” Michael Corbat –CEO of Citigroup



Customers tendency to conduct financial transactions through digital channels are getting higher Digital Banking Penetration for Transactions & Services



94% Bank Mandiri’s transactions have shifted to Digital Channel



(% of Customers using Internet Banking via PC or Smartphones )



100%



56



Singapore



94 41



Philippines



Indonesia



6%



60%



19



50%



Vietnam



6%



70%



11



Thailand



19%



7%



80%



24



Malaysia



90%



12% 11% 10% 8%



7



44 5



2011



40%



2014



30%



13



82%



94% 94% 88% 88% 90% 91% 93%



20%



5



10%



36 0%



2010 2011 2012 2013 2014 2015 2016 2017 Source: Digital Banking in ASEAN: Increasing Consumer Sophistication and Openness (McKinsey,2016)



Digital



Non Digital



Banks must follow technology development trends and focus on improving the service quality to customers Banking Everywhere Mobile Banking Social banking



ATM Branch



AI – Augment Banking Banks must be able to facilitate customers other than through bank channels.



Self service bank



Bank 2.0



Bank 1.0



Bank 3.0



Bank 4.0



NEW CHALLENGER



NEW TECHNOLOGY



Banks competes with Fintech companies, as well as collaborates or co-op.



Utilizing new technology to expand the network of banking products and services.



Payment Challenger



Lending challenger



Blockchain



Artificial Robotic Process Big Data Intelligence Automation Analytics



Application Programming Interface



Business model transformation must be carried out to face digital disruption and increasingly fierce competition Based on the Daily Social ID Survey (2017) to 991 respondents



117



67.2%



32.8%



Aware of the Presence of Fintech



Using Fintech Services



Role of Fintech in the Financial Services Industry



Fintech Startup in Indonesia



Source: Fintech.id (2017)



Payment



Transfer of funds



Personal Finance



Personal Loan



Savings



Insurance



Wealth Management



84%



68%



60%



56%



49%



38%



38%



*Based on PwC Global Fintech Survey 2017



Fintech company has many advantages The unregulated fintech company makes it more agile & experimental



BANK Yes



Conservative



Slow



Complex Older generation



FINTECH REGULATED BUSINESS METHOD



SPEED



ORGANIZATION HUMAN RESOURCE



No



Experimental



Fast



Simple Younger generation



However, banks still have some advantages Banks have higher trust, greater customer base & more infrastructures



85%



Existing and clear customer base Need to build a customer base



80%



Lack of customer trust



79%



Experienced with regulators



79% 80%



Not experienced with regulators



Many and complete types of products



82% 80%



Limited types of products



66%



Limited investment capital



An effective risk management program Lack of experience in risk management



Weaknesses of the Fintech Company



74%



A reputation for trust and stability



Extensive financial resources



Banks Excellence



81% 70% 83%



Source: The Economist Intelligent Unit, A survey of senior bankers and Fintech executives 2015



(% Answering "very important” or rather important)



3 How Bank Mandiri encounters Digital Economy



BANK MANDIRI BANKING EVOLUTION



?



57.4% 50.0% 42.4% 46.0%



4.0%



0.2%



2004



2006



2009



2013



Internet Banking



Mobile Banking



E-Money



E-Cash



2017 2018 Mandiri Now Online



Next 5 Years



2023



E-BANKING CHANNEL PRODUCT



MANDIRI ONLINE Banking services for Individual Retail Segment customers that can be accessed via a cellphone or PC



Digital Banking Products and Services in the Retail Segment



Mandiri ATM Banking services through Mandiri ATM or ATM Merah Putih



MANDIRI SMS



Mandiri EDC



Banking services using cellphone facilities for financial and nonfinancial transactions



Tools to receive Mandiri card transactions electronically through the VISA/Bank Mandiri network



LinkAja! MANDIRI INTERNET BISNIS Banking services via internet banking applications intended for business customers



MANDIRI E-MONEY Mandiri e-Money is a chip-based electronic money issued by Bank Mandiri



Server-based electronic money utilizing cellphone application technology, integrating SOE fintech products (e-cash, t-cash, t-bank, tmoney, and UnikQu)



Never stop innovating to make banking simpler



Research



Interaction Design



Visual Design



Shifting perspective from product centricity to customer centricity



My Shopping My Wealth



My Entertainment



My Education



My Finance



Mandiri Customer



My Travel



My Business



My Health



My Family & Friends



My Home



Customer’s Financial needs are one of the many needs fulfilled by the Bank



Mandiri Group as a customer centric One Stop Financial Service Provider



Banks need to continue to optimize IT capital spending, infrastructure capabilities and business process re-engineering



To respond to disruption, an open banking mechanism is needed to support national digital financial economic policies Open Banking Bank Indonesia Reference Portal



Technical …



Fintech 1



Fintech n



Standardization of API technical specifications is needed for easy integration between banks and banking partners (fintech, e-commerce and other digital economy ecosystems).



Business Model The determined business model can provide incentives for each player and is realized in B2B cooperation between banks and banking partners. API Standards



API Gateway Bank 1



API Gateway Bank 2



…



API Gateway Bank n



Risk Control Determination of risk and security standardization for all players, so that all parties have the same role in mitigating risk.



Licensing Bank 1



Bank 2



…



Bank n



Simplification of licensing cooperation between banks and banking partners to accelerate the time to market of the banking business.



Instead of competing, we prefer collaboration, enabled by our subsidiary: Mandiri Capital Indonesia who do we collaborate with? Corporate Venture Capital Mandiri Group has the mission to be the innovation arm of Mandiri Group.



Group Synergy



Start-up Company



UMKM



Start-up company especially in Financial Technology sector at seed and developing stage



Capital support for digital –based UMKM from WMM and incubator



Financial company that directly support Mandiri Group business



our investment: Payment



Lending



mPOS System



SME Solution



P2P lending



POS Apps



third party processor Digital Signature Services Firm



P2P lending



Cloud based acct. software



Coopetition Synergy between the financial industries is very important as one of financial inclusion strategies



Competition



Competition



Coopetition Collaboration with fintech to form a symbiotic mutualism (example: lending)



Bisnis Konvensional



Bank Worthy



Bank Worthy



Koopetisi



Bank



Bank



Credit Worthy (Unreached)



Credit Worthy (Unreached)



#1 tech companies need more funding and time prior to IPO



$239



6.9 years in 2013



10.1 years in 2018



$185



$137



Median time between 1st funding and IPO for US VC-backed tech companies



$98



$101



$92



$64



24



2012



2013



2014



2015



2016



Median Amount ($M)



source: cbinsight



2017



2018



#2 New fintech categories are raising



According to Aftech, new categories of fintech are growing such as equity crowdfunding, Robo-advisory, market aggregator, and online mutual funds agent source: Asosiasi FinTech Indonesia



#3 Principles on potential collaboration between banks and fintechs providers



1 Banks and fintech P2PL can collaborate in lending



2 Banks selling retail investment through fintech.



3 P2PL can cooperate with banks in NPL management.



4 Going forward, banks and P2PL need to optimize the financing potential by utilize larger business ecosystem.



#4 Recent innovation in banking to anticipate and adopt the development of financial technology system BTN



BTNPROPERTI.co.id Application for applying mortgage without need to come to the office in a simpler way and faster verification. BTN MORTGTECH HACKATHLON The goal is to look for qualified talents in IT development in finance and mortgage by preparing programs or applications that can make the mortgage business process better.



BNI



BNI DIGITAL LOAN (eform.bni.co.id) Application for applying loan (< Rp 1 billion) digitally. This include KUR, entrepreneurial loan, and non collateral loan. YAP Payment solution application that is done by scanning QR code through smartphone. Source of fund can come from credit card, debit, and server based electronic money (unikQu)



DBS



DIGIBANK A groundbreaking mobile-led bank. A revolutionary offering, digibank is paperless and signatureless, and brings together an entire suite of innovative technology – from biometrics to artificial intelligence (AI) – to enable customers to enjoy a whole new way of banking



MANDIRI



MANDIRI ONLINE Single access integrated service from two services that have been previously present, namely Mandiri Internet and Mandiri Mobile MANDIRI CAPITAL INDONESIA Fintech startup financing which is generally engaged in the field of payment and financing. It is also expected to help create innovation in Bank Mandiri.



BTPN



BTPN WOW! The digital platform to expand services to lower middle-class society that has not been touched by banking services. JENIUS Banking applications equipped with VISA debit cards to help with activities such as opening accounts, bill payments, money transfers, savings, deposits, debit card making, and funding allocations for financial arrangements.



Thank you