STRATEGY FORMULATION TO IMPROVE LOAN APPLICATION PROCESS AND CUSTOMER EXPERIENCE OF MICRO LOAN PRODUCT

• Main Author: Larissa, Lauditta
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35404
• Institution: Institut Teknologi Bandung

Digital transformation looks different in every industry and every company. In banking industry, digital transformation is far beyond just moving from traditional banking to a digital world. Digital transformation is a vital change in how banks and other financial institution learn about, interact with, and satisfy customers. Deployment of digital technologies enhanced process efficiencies, improves quality of products and services, and enables optimal resources allocation. However, there is only few number of banks in Indonesia that really digitally transformed, one of them is BTPN. To the extent that BTPN has digitized, they focused on retail-banking transactions, like online access to bank accounts and money transfer. The servicing to Micro, Small, and Medium Enterprises (MSME) has largely taken backseat. Financial Technology Companies (Fintechs), as new digital entrants, have spotted the market opportunity. As of April 2018, total loan amounting of IDR 7 trillion has been disbursed. It increased 173 percent compare to the end of December 2017. This number proves that public is more aware of the existence of fintechs. On the other hand, BTPN micro loan portfolio as of December 2017 dropped by 24 percent compare to the previous year. More over, the Cos of Credit (CoC) was also high, reached 18 percent in 2017. The high number of CoC happens due to huge operation cost, as most of the process done by human. Current process also give a hussle to customers as they need to go back-and-forth to the branch during the loan application process. Through the analysis conducted from external and internal business environment and strategy formulation using TOWS Matrix, Porter’s Generic Strategies, and Strategy Diamond, it is found out that in order to improve loan application process and customer experience of micro loan product, BTPN needs to digitalize the loan process and build business platform for MSME customers. BTPN is recommended to persue two strategies simultaneously, which are: built synergetic partnerships with fintechs through the arm’s-length strategy and integrate banking into micro and small business owners’ daily lives through the creation of business platform. By implementing the strategies, the company is expected to reduce cost of credit, improve loan processing, improve customer experience, and accessing a broader base of customers.