STRATEGY FORMULATION TO EXPAND CONSUMER LOAN BUSINESS ENABLED BY DIGITAL INFRASTRUCTURE CAPABILITY

• Main Author: Ahmadi, Ryan
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46946
• Institution: Institut Teknologi Bandung

The significant growth of the internet and mobile banking adoption in Indonesia is impacting a substantial shift of customer behavior; it changes how the customer wants to interact with their banks and where innovation can take its part in delivering a suitable value proposition to meet customer needs. Indonesia is the 3rd largest on smartphone users in Asia-Pacific, with more than 55% of 261 million populations as an active internet user, and about 130 million people are engaged in the social media platform. But there is only 48.9% that have a bank account, in specific only 17.2% is borrowing from the financial institution. It shows a gap between internet penetration and financial inclusion in Indonesia; on the other hand, banks need to identify these emerging trends to grab the gap opportunity. Banks will need more than just a digital platform but need to re-formulating the business strategy to encompass innovation and existing values. Through external and internal research analysis, which analyzing PESTEL, Porter’s Five Forces, McKinsey 7S Model, and Fishbone diagram to explore the business problem and to extract suitable solutions. The research is using the qualitative methodology with data collection si from a literature review and an in-depth interview with the internal Niu Bank team, Financial Regulator, and potential customer segment. This research found that Niu Bank need to improve the Digital Banking business strategy, especially on formulating new Business Model and new Segmentation, Targeting, and Positioning strategy for consumer lending business. Besides that, the importance of technology transformation to replace the existing manual burdensome operational process with the implementation of advanced technology and data management to effectively scale-up the portfolio number and deliver better customer experience on consumer loan business. These two strategies will impact the transformation in the whole company, specifically in the end-to-end Retail Banking business operation.