An interview with Sigit Prihatmoko


FST Media: What are your priorities for the next 12 to 18 months?

Prihatmoko: Every year we have some strategic policies as guidelines to support our long term objective to strengthen our financial growth. In 2014, our policies are:

• To synergise all business units and our subsidiaries to optimise profit through value chain activities. This means we encourage all business units to proactively create value chain opportunities among our customers, find opportunities to increase wallet share by up-selling and product bundling.
• In 2014, we believe the funding market is tighter than in previous years. For this reason we must balance our asset and liability growth prudently and maintain cost-of-fund as low as we can.
• Our future target is to offer next transaction banking in Indonesia by optimising customer engagement and capability of our e-channels.
• To support business objectives while keeping all processes efficient, we also improved our operational efficiency and utilised cost effectively.
• As an enabler, we also encourage our employee’s capability and enhance information technology infrastructure and application development for e-channels to strengthen our competitiveness in the market.

Specific to our objective to be the next transaction bank, we continue to develop our banking features, in particular our e-channel (ATM, SMS, and internet banking) through third party cooperation and bill payment opportunities.

FST Media: What will be the most significant challenge facing the financial services industry in the year ahead?

Prihatmoko: I believe in the year ahead the financial services industry, especially in Indonesia, has many significant challenges based on the regional environment.

Firstly, regional competition, especially after the ASEAN Economic Community (AEC) implemented permission for the free flow of services, investment, capital and skilled labour by 2015.

Secondly, there will be strong competition from the telecommunications and internet industries to perform payment transactions and offer e-money products and channels.

Next, Basel III regulation of the financial services industry is forcing banks to have higher capital as a cushion for better risk management.

Finally, the Indonesian Financial Service Authority (OJK)’s regulations that drive the financial services industry to better manage conglomeration.

In the last five years, Indonesia’s banking industry has enjoyed a higher interest margin compared to other ASEAN countries. Implementation of the AEC by 2015, and implementation of the ASEAN Banking Integration Framework (ABIF) including Qualified ASEAN Banking (QAB) criteria by 2020 have resulted in higher competition. For banks to have lower interest margins, and to get a similar profit level we must run the bank more efficiently.

FST Media: How are you leveraging big data and analytics to provide customers with the right products and targeted marketing?

Prihatmoko: We have a program called ‘Propensity Model’ to explore the selling prospects of our existing customers. We combine the data gathered from our core banking, credit card, and other systems to build our ‘Customer Data Integration’ (CDI). From that CDI, all customer facing entities have the opportunity to sell. We first try this in our call centre to make an offer when a customer calls us and is satisfied with our solution.

Next, we are looking at building a ‘suggestion’ feature to our existing customer through internet banking, SMS, and other channels to offer other products.

FST Media: How has internet banking and SMS banking services delivered value to the business and how do you plan to build on its success?

Prihatmoko: Internet banking is the future of building our relationship with our customer, not only in performing transactions. Internet banking supports both business banking and consumer retail. In business banking we already implement cash management for corporate customers. We have a dream to deliver total financial solutions through internet banking both for our business banking customers, and ‘as a good financial planner’ to our consumer and retail segment.

SMS banking has continued to grow in the last five years, due to its simplicity. SMS banking is our primary channel to serve the unbanked customer, through our branchless banking program. This will also be supported by implementing mobile and NFC.

FST Media: How has BNI’s Motion Service helped reach and service the tech savvy unbanked customer base in Indonesia, and how do you plan to continue to reach this market?

Prihatmoko: As a state owned enterprise, BNI has an obligation to serve the unbanked customer. Our plan includes serving these customers through agent banking and digital banking services. SMS and server-based e-money are the main infrastructures in place to provide this service.

We already have experience in maintaining relationships with ‘Payment-Point companies’ that cooperate with us in providing a public payment service (electricity and telecommunication). We have a plan to begin serving the unbanked customer through cooperation with them as an agent.

FST Media: Part of BNI’s 2014 strategy is to strengthen and enhance information technology infrastructure and application development for e-channel, how close are you to achieving this, and how will you measure success?

Prihatmoko: Right now we are enjoying our ATM Service, next we must focus on enhancing our internet and mobile services. We also must comply with the OJK to serve the unbanked customer.

For corporate and business banking customers, we plan to provide a full range of transaction services from cash management, treasury services, and also trade finance. We believe those kind of services have benefits for both parties. As a bank, we will benefit with lower transaction costs, and from a customer point-of-view, they will benefit by being able to perform a bank transaction from their desk.

We will measure the successful development of e-channel by measuring transaction migration from branches to electronic channels. This migration also gives us efficiency, because we do not need more resources to serve our customers at the branches.

FST Media: What is proving to be your most effective customer acquisition channel, and why?

Prihatmoko: Our most effective acquisition channel still comes from our relationship manager or branches salesperson, because banking is about ‘giving a solution’, it does not hinder our program to build acquisition from each of our electronic channels. In the future, all electronic channels must able to sell or give recommendations:

We already have an application on our ‘non cash – ATM’ to offer customers their favourite transaction. It will remind them when they enter the same menu in the next month that they do not need to enter a complex billing number.

Through our internet banking, we also offer simple services such as ‘open time deposit’ to offer flexibility to busy customers who need a simple investment. Next year we also have planned to be a ‘mutual fund supermarket’ through our online channels.

FST Media: How do you encourage a culture of innovation in your team?

Prihatmoko: We hire a consultant to take a survey and investigate the service we offer our customers, and we take on board the opinions of non-customers about our services. They also give us suggestions as to what is really important to a customer, and what services are not working at an operational level.

For our business banking customers, we also conduct customer gatherings to discuss what services we can offer in both a regular and segmented basis. We process input from our customers to make our products and services better.

We also regularly conduct ‘internal innovation competitions’ to encourage all employees to present ideas to create better products and offer better service to our customers.

FST Media: What information sources do you consider invaluable for your job, and why?

Prihatmoko: I think all sources of information are valuable for me, it just a matter of how we anticipate and use these sources to finish our task.

FST Media: What do you consider to be the greatest achievement of your career to date?

Prihatmoko: My greatest achievement is to centralise trade finance transactions to one place. This activity includes implementing internet banking for trade transactions, setup and implement trade product development based on documentary collection and open account transactions, and implement ISO9001:2008 for BNI Trade Processing Centre.

FST Media: Every leader has a legacy they wish to be remembered for, what is yours?

Prihatmoko: I believe we are now in an era of the knowledge worker, where we rely on our subordinate about their precious knowledge. They are more tech savvy, and more knowledgably than us, especially about new technology, new systems, or new inventions. So my biggest legacy is when I can make future leaders more knowledgeable and better able to foster innovation. I believe companies can survive if they are more adaptable, and adaptation comes from innovation.