DIGITAL TRANSFORMATION IN PAYMENT FINANCIAL SERVICES INDUSTRY IN INDONESIA

• Main Author: Katriana Wirahadikusumah, Nina
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35605
• Institution: Institut Teknologi Bandung

This paper covers digital transformation in general across all industries and in payment financial services industry in particular. Studies shows digital transformation had started since decade ago, but many companies failed to identify which caused them lost or out of the business. The key drivers for digital transformation in payment financial services industries are new empowered millennial generations, significant adoption of mobile users across all generation of ages, the rise of e-commerce, the non-financial services industries new players , fintech companies, and very large unbankable population for emerging countries like Indonesia. This paper will cover how new digital players transform banks and financial institutions to reimagine their role as trusted broker in the new digital payment economy. The paper will include author’s own analysis and research based on publicly available materials, and in depth discussion with three key executives interviewers coming from different industries of digital payment: telco fintech, fintech payment startup, and very large bank. The paper will analyse these three different industries transform their business to be able to compete and stay ahead in the new digital payment economy. In conclusion, digital payment transformation in payment financial services industry creates unique competition and coopetition (competition cooperation) among the players. The market is still very huge with untap potential, with significant digital age and unbankable population in Indonesia. Banks do not compete with fintechs as both have very different business model. Fintechs will compete with other fintechs, bank only competes with fintechs in digital payment with small amount, while the larger amount digital payment still dominated by banks as the trusted source for financial services. Fintechs will continue to strengthen their engagements with their customers to secure more fundings and increase their market valuation. Banks will continue to strengthen their core as payment instrument with trust as their core competencies. Cybersecurity will be key focus for banks to continue building their credibility for trust in the digital era. Last but not least, cultural transformation, championed from top level management to all level, is the most important underlying foundation for organization to be successful transforming in the digital era.