Oldest Indonesian Bank Speeds Up Rural Digitalization

Photo credit: iStockphoto/Jacob Ammentorp Lund

PT Bank Rakyat Indonesia Tbk (Bank BRI), one of the largest banks in Indonesia, is integrating three ecosystems to speed up the digitalization of the Micro, Small and Medium Enterprises (MSME) segment in Indonesia. Bank BRI is a 70% government-owned operating company.

By aligning the three ecosystems — market, digital and village — Bank BRI, which is also the oldest bank in Indonesia, is hoping to build a sustainable business ecosystem during the pandemic.

“The crisis due to the coronavirus pandemic has pushed us to innovate faster. We synergize the three ecosystems as a way for us to digitize MSMEs to continue to grow, rising from the pressure of coronavirus impacts," said Sunarso, president director at Bank BRI at the nationwide webinar titled “The Future of Digital Banking.”

The effort will see Bank BRI providing education, help, infrastructure, branding and promotion for MSME businesses.

"For the market ecosystem, for example, Bank BRI helps traditional markets by introducing online shopping, whether through WhatsApp, websites, mobile apps, or cooperation with start-ups. We build a web market that supports yields from villages to enter the markets and then being absorbed by consumers through online shopping. So, we digitize traditional markets," said Sunarso.

Bank BRI is also expanding its web market presence to empower more traditional merchants, while increasing the number of digitalized traditional markets. Currently, BRI has 4,247 market websites with 45,432 registered merchants. The target is Bank BRI can build 5,241 web markets and empower 52,410 people.

"The potential of traditional markets in Indonesia reaches 14,182 markets and the number of merchants is 2.54 million people. We dedicate one person in charge in each market to educate members of the market ecosystem, one of which is related to cashless society."

Partnerships with several large e-commerce companies and hailing rides, ranging from Tokopedia, Grab, Bukalapak, Shopee, Gojek, to finance Micro Credit Program (Kredit Usaha Rakyat/KUR) to merchants or their partners, will also help MSME companies. For the village ecosystem, Bank BRI will develop clusters and specific products.

Bank BRI's move to integrate the three ecosystems is part of the company’s overall digital strategy. The strategy also includes digitizing business processes and creating alternative business models.

"We continue to carry out business transformation, both digital and cultural aspects. Digital has become the DNA of Bank BRI. We have also adopted open banking and opened up the possibility of using blockchain technology to support business processes," said Sunarso.

Bank BRI has already introduced various digital products and services, including BRIspot, Ceria (digital loan and saving), and BRImo. It is also aggressively building collaboration with fintech start-ups such as Investree, TaniHub, LinkAja, and strengthening P2P lending channels such as Modalku and Investree.

Photo credit: iStockphoto/Jacob Ammentorp Lund