Leading the digital banking revolution in Indonesia | digital, innovation


The combination of mobile and internet usage to meet Indonesia’s growing appetite for financial services opens up a wave of new opportunities for institutions that respond quickly and are able to innovate in creating solutions to meet changing customer needs.

“Digital technology will continue to transform the banking landscape in Indonesia,” said Dini Isnarti, senior vice president, wholesale banking group at PT Bank Mandiri. “As people embrace the internet and mobile banking, digital channels are critical to retaining customers and driving growth for financial institutions like ours.”

This is evident from the volume of trades executed through KOPRA, the bank’s wholesale platform. Marking a significant leap from its traditional banking channels, Bank Mandiri recorded 326 million wholesale transactions in June 2022, worth 8,053 trillion rupees ($518 billion).

At the same time, the growth of technology and e-commerce players is pushing Indonesian banks to create broader ecosystems to reach more of the value chain and encompass all stakeholders.

Bank Mandiri is also looking to stand out more. “In the future, we plan to develop a mobile app version of KOPRA, so that it can provide more flexibility in executing trades anytime and anywhere,” Isnarti added.

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Respond to changing customer needs

The behavioral shift towards digitalization due to Covid-19 has accelerated the development of digital solutions more broadly across the banking industry.

This is particularly notable in Indonesia. According to a statement from Bank Indonesia in 2021, digital banking transactions increased by 46%, or 40 trillion rupees, compared to the previous year.

Furthermore, the Financial Services Authority (Otoritas Jasa Keuangan, or OJK) has responded to the trend by releasing its Master Plan for Digital Banking Transformation as outlined in the Indonesian Banking Development Plan 2020-2025.

Bank Mandiri has long been at the forefront of this market trend. It began its digital journey in early 2008, when it launched its cash management system. Then, in 2011, it introduced mobile banking. Last year, she launched what she calls her digital “super platform,” KOPRA by Mandiri.

“We offer a one-stop capability that allows customers to perform many business activities through KOPRA seamlessly,” Isnarti explained.

These capabilities include, for example, online integration for customer current account opening, supplier registration in the ecosystem, consolidated financial dashboards and virtual assistants.

In addition, KOPRA also allows clients to transact in many FX currencies with Bank Mandiri’s special rate, and track wire transfers or fast payments via remittance tracking.

“KOPRA is designed to provide complete end-to-end solutions to wholesale customers, from principal to end buyer,” Isnarti added. Specifically, it comes with features such as value chain finance, trade finance, and guarantees that match the needs of the ecosystem.

Driving a digital future

Proof of KOPRA’s success can be seen in the growth of wholesale digital transactions at the bank over the past year. In June 2022, for example, the average monthly number and volume of transactions via KOPRA had increased by 37% and 27%, respectively, since its launch in October 2021.

“Digitization is the future revenue generator, both interest and fee based,” Isnarti said. Using June 2022 as a benchmark, KOPRA’s fee-based revenue reached Rs 1 trillion, up 13% year-on-year.

Digitalization also helps the bank to acquire new customers through its captive value chain. “We can also acquire the suppliers and distributors of our key customers,” she added.

In addition, Bank Mandiri’s efficiency levels have improved significantly over the past few years. “We were able to reduce the cost-income ratio in June 2022 to nearly 35%, and digitization is central to this result,” Isnarti explained.

Among the bank’s next steps will be extending KOPRA’s functionality to its overseas branches such as Singapore, Shanghai, Hong Kong and Dili.

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