Driving growth through innovation

Indonesia insights: innovating for growth

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At an exclusive roundtable session, executives from prominent Indonesian financial institutions highlighted the need for industry thinking to evolve, and explored innovative approaches to tap into a large unbanked population, as well as the impact of robotics on driving operational and cost efficiencies.

Digital transformation is the way forward

Participants at the roundtable session noted a growing trend in financial services of enhancing and unifying the customer experience across multiple channels and digital platforms. They also noted increasing competition within the sector, with many industry players offering almost identical services and solutions to one another.

For many participants, the path forward lies in digital transformation. However, many financial services organisations are adopting initiatives of fintech competitors – a process that can present numerous technology and operational hurdles for traditional businesses.

Collaborating with fintechs

Indonesia’s chief regulators are keeping a close watch on fintech developments. Financial firms need to first understand why they are collaborating with a fintech company and develop a strategy.

“With FinTech, do you compete with them, collaborate with one, or build the capability to collaborate with many?”

- Evan K Wiradharma, Financial Services Advisory, Indonesia, EY

Regulations versus culture: differences between banks and insurance

For banks to adapt to customers’ demands successfully, cultures and mindsets ultimately need to change.

Insurers agreed that regulations in the insurance industry are still very generic and not very clinical, particularly when compared against the banking industry. While it was argued that many regulatory requirements need to be better defined, they also noted that the current situation allows them freedom to be more innovative.

Unbanked market

The gap between Indonesia’s unbanked and lower-to middle income populations remains wide. One of key barriers to tapping into this unbanked market is the lack of cellular signal across most parts of the country. Many within the lower income bracket live in areas where cellular signal is still poor or intermittent. Without a strong and reliable signal, few will consider advanced digital banking services.

Awareness and appreciation of what banks can offer, especially among the unbanked, also remains low. Most see banks as a place for saving or investing only.

Digitalising banking processes with robotics process automation

Robotics is gaining renewed interest in Indonesia. Participants recognised that such technologies could improve efficiency and offer cost saving benefits. One pertinent example is live chat, where consumers interact and gain quick answers from a chat program or chat bot. Such developments are helping to improve response times and smooth processes.


Although the banking and insurance industries face multiple hurdles in Indonesia, the opportunities outweigh the challenges.

The entry of non-bank players and the growing regulatory burden also impacts incumbents. To better compete and become more responsive to customer demands, banks and insurance organisations should seek positive cultural change and to consider collaborating closely with fintechs.

The quotes and views of third parties above are not necessarily the views of the global EY organisation or its member firms. Moreover, they should be seen in the context of the time they were made.