When we think about digital disruption, a sophisticated killer app is usually what comes to mind. That might not be the case with BTPN, a Bank from Indonesia who serve the micro segments (often named unbanked customers) through its frugal and minimalist digital banking services. Striving for financial inclusivity, in 2015 they launched BTPN Wow!, a platform designed using the mobile phone as a means to deliver financial services and products in a cost-effective way.
Their quest is by no means an easy feat. Uneven infrastructure distributions, low-level education and digital literacy, and numerous systemic problems act as barriers that requires in-depth contextual understanding in a need of innovative services. BTPN Wow! answers that challenge by providing a savings account that can be accessed using any GSM-based mobile phone (not necessarily a smartphone), utilizing the Unstructured Supplementary Services Data (USSD) technology with minuscule data transfer rate that works well even in remote areas where cellphone signals are very weak. A notable pioneer of this technology is the M-Pesa in Kenya, which BTPN also drawn lot of inspiration when developing their own product.
In addition to deploying the proper digital technology, human-centric approach is critical to reach the desired level of inclusivity by stripping the inessentials and focus on what matters most. Since accessing a banking service would be considered an entirely novel touchpoint to most customers, educating and managing customers is key. The system also includes hundred of thousands customer-turned-community by incentivizing “Bank Agents” who constantly reaching out to people in remote areas who have never before had access to banking services and making branchless bank idea possible, serving as many as 4.3 million customers (as of 2017).
With BTPN Wow! and Jenius (millennial-focused digital banking) as BTPN’s flagship investments, the digital-based endeavors finally shows promising results. The lower operational cost and the focus on more quality growth has given a positive mark. The net profit after tax (NPAT) in 2018 surged by 61% from the same period of last year. Jerry Ng, who served as BTPN’s president during those periods, reported this growth were the outcome of digital transformation in the company. “We did not only create digital-based products and services. We also do digitalization in existing business. Now BTPN is more integrated and more focused in fulfilling the customers’ needs quicker, easier and saver”.
Amidst the trend of big data and aggregated analysis using artificial intelligence and machine learning, this human-centric approach on digital innovation shows a number of promising potentials. In February 2019, BCG just released their research report on ‘How Mobile Money Agents Can Expand Financial Inclusion’. The work demonstrates that agent networks can flourish in areas that support healthy numbers of transactions and drives scalability, confirming the practices that BTPN and other financial inclusive services already been doing. These examples remind us that in order to achieve a successful digital transformation, having a proper contextual understanding is as important as developing the technology itself.