TheJakartaPost
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Bringing banking to masses
In Indonesia, only around a third of the population is connected to a formal financial services institution.
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In Indonesia, only around a third of the population is connected to a formal financial services institution. (Shutterstock/Alohaflaminggo)
I
n Indonesia, Asia’s third most populated country, only around a third of the population is connected to a formal financial services institution. It’s thus no surprise that the Indonesian government wants to more than double that percentage, connecting 75 percent of the population to a form of bank by 2019.
President Joko “Jokowi” Widodo has introduced a national strategy to promote financial services through education, public funding facilities, supportive regulations and consumer protection.
As Indonesia strives to bank the unbanked, digitalization is one way to achieve financial inclusion in the country. Considering that the country has a majority young and technologically savvy population, projected to reach 168 million by 2020, and that the number of internet users is also expected to rise by 8 percent by 2020, digital transformation would be a good approach to tackle the banking gap.
According to the 2018 PwC Indonesian Banking Survey, technology continues to drive business transformation with a focus on front-end customer platforms. However, changing customer needs is a strong second priority, with banks keeping an eye on digital branches and fintech disruption.
