• Monday, 25 June 2018

How to Build A Bank Without A Branch

perbankan, finansial, Indonesia

Now some banking sector has begun seeing the opportunity in the midst of technological progress. Since “bring your own device” (BYOD) went viral, banking see a new economic opportunities. BYOD is a campaign for employees to work with their own gadgets. The term is start spreading related to massive use of smart phone. More and more community in Indonesia and in other parts of the world are this substitution of personal assistant, their own gadgets.

Banking planning to use this phenomenon by allowing customers to access their bank account without having to go to the nearest bank building. To the extreme, some people stating that a bank will not really a physical thing. Bank buildings will be replaced with the online one but this concept is still on debate. Cyrus Daruwala, Managing Director at IDC Financial Insights have shared his thought about this.

What happens is that everyone looked at the branch as one touch point. Think of it, banking transactions mostly done in the ATM, then the branch, call center, and point of sale (POS). When we consider this touch point, Indonesian customers, especially the elders still feel safer to transact in a branch. If the group still feel safer with the building physical bank, we cannot ignore physical bank.

“Indonesian customer feel more insecure walking into a branch. When they feel more secure walking into a branch, you can’t take a branch away. So instead of investing very heavy in tellers and branches and all of that at the branch, so this automation with the video embedded, that’s creating a bit of a wow effect even with the large skeptical of tech will saying wow this is cool, this is like a normal branch. So it’s not like a branch less banking, it’s a branch of the future,” he said.

The writer of “I Take This Train Too” explained the concept of bio metric automation: face identification where one does not need to carry a wallet full of cards and notes. Detection this will be automatically recognize customers and depositors so transactions will be don’t in three minutes or so, compared to a 25 minutes normal process. This may be applied to banks in Indonesia. Cyrus see that Indonesian banking still want to reach for common people such as farmers, laborers, and fishermen in remote areas like Sabang.

The question is how for community groups last? There are two ways, according to Cyrus. By using sim cards and aligned signals telephone and anyone can send short message and use this to transact. Second, the branch could be in the post office, in the department stores, or possible normal branch offices. The latest and the newest thing in Indonesia and nobody in the world is doing, is what they called correspondent banking. Doesn’t matter which bank you are with, it will be one counter, say like the Seven Eleven. That way, the Indonesian banks could reach the unbanked or people that still not using bank services.

“You can do your utility bills, you can do your phone bills, you can do your payments, and you can do everything in there. So they are all going to one touch point which is the Seven Eleven or the post office. So that includes everybody, no matter how far fetched you are to the whole ecosystem. And that’s a very uniquely Indonesian thing,” he added.

Meanwhile, financial situation of Indonesia these days are closely connected to the economic sector. According to Cyrus, a sentence best to describe Indonesia this year is that 2015 not a stellar year, but also not too bad that may be easily forgotten. There was nothing too good or that is too bad in the economy and growth this year has reached a certain percentage.

It does not mean banking are not going well, but all people are more to keep their assets. When the economy seem tighter, consumers tend to save more. If this had happened, production narrowed and GDP declined. During the community reducing consumption, money rotating in money circuit or liquidity pool then banks can’t do much. This is why the bank said that if every people keep around two to five million rupiah and just put it in deposits, a bank is also can get the money in place other.

If there are much activities in the community and spend their assets more, like investment, homebuyer, or exchanging foreign currency. Things like this gives life to liquidity pool and banking starts to produce money. The year of 2015 is good enough, but there are chances to face the greater challenges in the year ahead.

Grace Eldora

Grace Eldora Sinaga is a journalistic practitioner, graduated from Faculty of Communication Study Majoring Journalism, Unpad. She loves to learn Asian cultures and photography. She can be contacted at gracel@buminawa.com or twitter @glaceldo.