BRI Going Forward: From Conventional Channel to Multi Channel Customer Approach
PT. BANK RAKYAT INDONESIA (Persero), Tbk.
3rd Annual Technology & Innovation
Irianto Senior Executive Vice President Change Management
OUTLINE
2
1. Banking Industry Main Drivers, how to utilize demographic capital ………………... Globalization …………………………………………………………………………………………………………….…...… Digitization ……………………………………………………………………………………………………………….……… Urbanization …………………………………………………………………………………………………………….………
2. Banking Evolution, not only corporate transformation but also customer………. Corporate Culture Transformation …………………………………………………………………………….…….. Customer Penetration Transformation ……………………………………………….……………………….……. Omnichannel (Customer & Company Perspective) ……………………………………………………….…. Disruptive Technologies, Threats and Opportunities …………………………………………………….…. US Retail Banking Trend …………………………………………………………………………………………………... Shadow Banking Threats …………………………………………………………………………………………….......
3. BRI's Multi Channel Coverage, from office to moving/automobile office and digital services ……………………………………………………………………………………….... Number of Delivery Channels ………………………………………………………………………………….......... Transforming to Omnichannel …………………………………………………………………………………………. BRI Innovation ………………………………………………………………………………………………………………….
4. BRI-Sat: the First Satelitte Owned & Operated by Bank …………………………………..
3 4 5 - 6 7 - 10
11 12 13 14 15 16 17
18 19 20 - 22 23 - 29
30 - 31
Banking Industry Main Drivers How to Utilize Demographic Capital
3
4
GLOBALIZATION
26
85
2012 2025
Global flows are growing and contribute to GDP growth
Global Flows of goods, services, and finance $ trillion
Source : McKinsey Global Institute, Global flows in a digital age: How trade, finance, people, and data connect the world economy, April 2014
• more benefit for the most connected countries than the least connected.
• global goods flows through the top 50 routes down in 2011.
• total cross-border flows of goods, services, and finance from emerging economies up in 2012.
• commercial sellers on eBay export to other countries, vs traditional small businesses
5
DIGITIZATION| SOCIAL MEDIA TREND CUSTOMERS: CITIZEN TO NETIZEN
Internet and social media users continues to increase. Number of netizens have exceeded number of citizens from big countries
6
DIGITIZATION| SOCIAL MEDIA TREND CUSTOMERS: CITIZEN TO NETIZEN
The USA, whose 141.8 million
accounts represents 27.4 percent
of all Twitter users, good enough
to finish well ahead of Brazil,
Japan, the UK and Indonesia.
In terms of cities, Jakarta
finished first ahead of Tokyo,
London, Sao Paulo and New
York.
INDONESIA NO.5 JAKARTA NO.1 BANDUNG NO.6
DIGITIZATION | INTERNET USERS CUSTOMERS: CITIZEN TO NETIZEN – INDONESIA (JAN 2014)
7
INDONESIA: SNAPSHOT
251,160,124 TOTAL POPULATION
72,700,000 INTERNET USERS
62,000,000 ACTIVE FACEBOOK USERS
281,963,665 ACTIVE MOBILE SUBSCRIPTIONS
51% 49% URBAN RURAL
29% INTERNET PENETRATION
25% FACEBOOK PENETRATION
112% MOBILE SUBS. PENETRATION
Source: adopted from We Are Social
ANY SOCIAL NETWORK
GOOGLE+
INDONESIA: SOCIAL MEDIA USE
98% 79%
93% 59%
80% 41%
74% 33%
39% 15%
32% 12%
OWN AN ACCOUNT
USED IN THE PAST MONTH Source: adopted from We Are Social
8
URBANIZATION - DEMOGRAPHY | URBAN vs RURAL
1995 2000 2005 2010 2050
Rural Population 64 58 52 46 33* (percentage of total population) Urban Population 36 42 48 54 67* (percentage of total population)
Source: World Bank
*) forecast by the United Nation (UN)
Urban life style is also
important
9
URBANIZATION - DEMOGRAPHY | PRODUCTIVE AGE
Percentage share of
total population (%)
Total (million)
0-14 years 27.3 67.14
15-64 years 66.5 163.37
65 years and over
6.1 15.10
245.61
Source: CIA World Factbook
10
URBANIZATION - INCOME & SPENDING | CONSUMING CLASS
45 85
135 170
195 180
145 110
2010 2020 2030 in 5-6% GDPscenario
2030 in7% GDPscenario
An estimated 90 million Indonesians could join the consuming class by 2030
Consuming class2
Below consuming class
Million people1
Additional people in the consuming class 40 90 125
1. Rounded to the nearest five million
2. Consuming class defined as individuals with an annual net income of above
$3,600 at 2005 purchasing power parity (PPP).
3. Based on annual GDP growth of between 5 and 6 percent
Source : McKinsey Consumer and Shopper Insight (CSI Indonesia 2011)
11
URBANIZATION - INCOME & SPENDING | SPENDING
Indonesia’s savings and investment and retail sectors are expected
to become large consumer markets by 2030
12
Banking Evolution Not Only Corporate Transformation but Also Customer
13
BANKING EVOLUTION
Corporate Culture Transformation
1940-1960’s 1990’s 2010’s - present
The development of technology has changed the business processes of the banking industry
14
BANKING EVOLUTION
Customer Penetration Transformation
1960’s
2011’s
2014’s
The development of technology has also changed the penetration of the banking industry in providing financial solutions for its customers.
c
15
Customer perspective: + More mobility + More individually + More quality
Company perspective: + Higher client loyalty + Higher cross-sales + Higher efficiency
Branch
Customer
ATM
Social Media
Internet
Mobile
Call Centre
Physical channels
Personal channels
Virtual channels
BANKING EVOLUTION
Omni channel creates more values for customers and company
Banks and customers enjoy the added value of technological development
16
BANKING EVOLUTION
• Disruptive technologies will emerge as both an opportunity and a threat to banks.
• 30 to 50 percent impact on profits or losses.
Disruptive Technologies’ Threats & Opportunities
Source: Strategic Choices for Banks in the Digital Age, McKinsey&Co
17
Transformation distribution and go-to-market strategies can improve the efficiency ratio by more than seven percentage points
BANKING EVOLUTION US Retail Banking Trend
The more that customers use digital channels, the more they want human interaction.
Source: The Future of US Retail Banking Distribution, McKinsey&Co
18
Shadow Banking’s Threats shadow banking is bank-like activity undertaken by a firm not regulated as a bank.
Pay
men
ts
Savi
ng
Fi
nan
cin
g Se
rvic
es
Peer to peer payments
Trading/investment advisory
Crowfunding/ mediation
Personal Financial Management
Advances in technology have created a shadow banking business that could substitute banking product and services. Shadow Banking could be a tough
competitor for banking industry
BANKING EVOLUTION
19
BRI's Multi Channel Coverage From Office to Moving/Automobile Office
and Digital Services
BRI | NUMBERS of DELIVERY CHANNEL
20
LOW HIGH Cost per Transaction
E-Channel Moving/Automobile Channel
Conventional Channel
Branch Offices
Hybrid Lounge
Sub Branch
Cash Offices E-Buzz
Teras Keliling
BRI BRI Unit
CDM
ATM
EDC (Merchant EDC, Brilink Agent EDC, Office EDC)
Teras BRI
Teras Kapal
BRI
Internet Banking
Mobile Banking
3,904,644 users 153,786
21,215
426
2 1
610
55
463 586
5,306
980
2,531
10,519,36 users
Phone Banking
414,050 Calls/month
21
BRI | AUTOMATIC TELLER MACHINE BRI
6,085 7,292
14,292
18,292 20,792 21,215
2010 2011 2012 2013 2014 Jun'15
ATM BRI (Unit)
Our Network
Our Features
SERVE 259 FEATURES Card Services:
Balance Info | cash withdrawal | Transfer | Registration | Inquiry
Payment :
Personal Loan | Credit Card | Multifinance | Water Bill | Electricity Bill | Phone Bill | Pay TV | Insurance | Tuition Fee | Property Tax
Purchase:
Ticketing | Top Up | Phone Credit
22
BRI | CASH DEPOSIT MACHINE BRI
39 89 92
192
392 426
2010 2011 2012 2013 2014 Jun'15
CDM BRI (Unit)
Our Network
Our Features
SERVE 202 FEATURES Card Services:
Balance Info | cash deposit | Transfer | Registration | Inquiry
Payment :
Personal Loan | Credit Card | Multifinance | Water Bill | Electricity Bill | Phone Bill | Pay TV | Insurance | Tuition Fee | Property Tax
Purchase:
Ticketing | Top Up | Phone Credit
23
BRI | ELECTRONIC DATA CAPTURE BRI
12,719 31,590
44,715
85,936
131,204 153,786
2010 2011 2012 2013 2014 Jun'15
EDC BRI (Unit)
Our Network
Our Features
SERVE 256 FEATURES Card Services:
Balance Info | Create PIN| Transfer | Registration | Inquiry
Payment :
Personal Loan | Credit Card | Multifinance | Electricity Bill | Phone Bill |Tuition Fee | Property Tax
Purchase:
Ticketing | Top Up | Phone Credit
24 source: BRI’s publication
Number of BRILink Agents
BRILink Agents Location
Number of BRILink transactions
Sumatra Agen: 22% Trx: 30%
Java Agen:58% Trx: 48%
East Indonesia Agen:20% Trx:22%
Banking Services in BRILink Agents
Cash Deposit & Cash
Withdrawal
Payment Point
(electricity, phone, loan, etc)
Purchase
Top up mobile phone voucher &
electricity voucher, buy goods,
etc.
Transfer (to intern al
bank & outside the
bank)
No need bank saving
account to do
transaction
(million)
24,700
27,643
32,483
Dec'14 Mar'15 Jun'15
Java56.8%
Sumatra22.3%
Mid &
Eastern
Part20.9%
5.96
2.34
6.77
Dec'14 Mar'15 Jun'15
Java
48.6%
Sumatra
29.6%
Mid &
Eastern Part
21.8%
BRI | BRI INNOVATION - BRILinks
is utilization of BRI’s e-banking infrastructure by third parties (BRILink Agent) through fee sharing scheme
BRI | BRI INNOVATION - BRILinks
25
1. Balance Information
2. Transfer
3. Top up Mobile Phone Voucher
4. Payment Points
BRILink Features:
TUNAI
BRILink Advantages: Real time online Fast and easy transaction Safe by using customer PIN Variety of transactions (features and facilities) Can be accessed by any other bank ATM card users who are members
of the LINK, ATM Bersama and Prima Network
1. Cash Deposit
2. Payment Loan
3. Cash Withdrawal
1. Balance Info 2. Payment and
Purchase 3. Transfer 4. Electronic Access
Code (electronic token)
5. Check Agent Validity
6. Registration 7. Top Up
“Access to credit is a key link between economic opportunity and economic outcome. It is essential for individual empowerment. Yet currently almost two third of the population in Indonesia does not have access to any banking services, and close to half have no savings accounts. Micro credit program such as those implemented by Bank Rakyat Indonesia have been successful in extending coverage to remote areas.”
Christine Lagarde Managing Director IMF
Indonesian Poised for Indonesia’s Economic Potential
Speech at University of Indonesia, Jakarta September 1st, 2015
BRI | BRI INNOVATION-TBank
26
Electronic money product or mobile phone saving
account that uses mobile phone number as virtual
account. The T-Bank balance is separated from phone credit balance and
can be used for transaction (purchase, pay the bill, cash
withdrawal, etc.)
T-BANK Advantages: No administration costs, interest, taxes No minimum balance Maximum balance of Rp 1 million (partial registered) and Rp 5
million (full registered) SMS notification for each transaction Can be used in all types of mobile phones
T-BANK Features: 1. Balance Information 2. Purchasing and Payment 3. Transfer 4. Electronic Access Code
(electronic token)
5. Check Agent Validity 6. Registration 7. Change PIN 8. Top Up T-Bank’s
balance
27
BRI | BRI INNOVATION – Teras Keliling BRI
• “Teras Keliling BRI” is an innovative moving branch
• Financial inclusion
• To accelerate the low-cost funds, increase the number of customers and support the growth of fee based income.
• Today, BRI operates 610 “Teras Keliling BRI” throughout Indonesia.
- 100
350 465
610 610
2010 2011 2012 2013 2014 Jun'15
Teras Keliling BRI
28
BRI | BRI INNOVATION – Teras BRI Kapal
“Banking Service in
Archipelago”
Archipelago of Kepulauan Seribu (Thousands Island) Area: ± 10,8 km2 land dan ± 7000 km2 waters Population : ± 21.554 people (BPS, 2011) Main industry: fishing & tourism Coverage Areas of Teras BRI Kapal: Untung Jawa island, Tidung island, Pramuka island, Panggang island, Kelapa island, and Harapan island
Coverage Areas of Teras BRI Kapal
SERVING FISHERMEN AND COASTAL COMMUNITY
BBC NEWS http://www.bbc.com
/news/business-
34079633
29
BRI | BRI INNOVATION – Teras BRI Kapal
The Boat is equipped with:
Banking hall
1 Unit ATM
Total passengers : 11
people (1 teller, 1
customer service, 2 micro
account officers, 2
securities, and 5 crews).
ATM
Customer Service
Banking Hall
30
BRI – Sat: The First Satelitte Owned & Operated by Bank
BRI | BRI SAT
31
Specification:
• Weight : +/- 3.500 kg • Number of transponder : 45 • Coverage :
Indonesia, ASEAN, Nort East Asia , part of Pacific and West Australia
• Increasing service quality (service level agreement), and similar SLA for Rural and Urban areas
• Increasing technology reliability
• To reach the unreacheable
Thank You
32
