DISRUPTING SMALL MEDIUM ENTERPRISES (SME) MARKET THROUGH THE CREATION OF NEW DIGITAL PRODUCTS TO TAP THE UNSERVED NEEDS

• Main Author: Hanief Candra Pradana, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53420
• Institution: Institut Teknologi Bandung

The presence of vast advancement technology has forced companies to rethink about their relevancies towards the customer needs more often. It has disrupted many industry sectors including financial services. Technology has foster innovation and interaction between company and its customers. It creates a new phenomenon where company and its customers becoming more engaged because customers now constitute the core of the product creation process for any business and serve different roles in innovation processes that create value. This approach is known as value co-creation. Saku Bisnis is one of the line of businesses at Bank Saku serving the Small Medium Enterprises (SMEs). The business model of Saku Bisnis is focused on giving financial support / loans (lending centric) accompanied with convenience of relationship manager (RM) services to the customers. Since its inception in 2015, this business has proven as a promising business for the new Bank Saku’s backbone. During the first 4 years of business establishment (2015-2018) the growth of Saku Bisnis was considered among the fastest in the Industry with CAGR of 25% (compared to 10-12% of the Industry). However the strategy to acquire more RM to bring more portfolio for Saku Bisnis is not sustainable. Saku Bisnis experienced decline in growth in 2020, this takes account of the business shock due to pandemic COVID-19. After understanding different academic literature and qualitative data from in-depth interviews, this study has obtained several recommendations. First, Saku Bisnis needs to seek for new alternative products or services offering to the market since there are unserved needs from SME owner. There are three areas where customers expect banks to provide: (a) Better business transaction management; (b) A more accessible digital loans experience; and (c) Business management support to expand their knowledge horizon and ease their operations. Second, Saku Bisnis have to build the platform gradually through iterative process with customers also in accordance with strategic priorities of Saku Bisnis Management. The sequence of proposed product development stages are : 1) Digital Business Platform for Business Transaction & Deposit Account Management, with this platform customer can transact through application instead of going to branch; (2) Partnership with Business Software Provider to be Integrated with Bank Data and Offering free software to be used, with this product, customer can easily manage business operations and monitor it remotely. Business data will also be generated as the insights for SME owners. (3) Digital Loans for SME. The main challenges in the credit model for SME is the availability of data, by enabling the first two products, Saku Bisnis will be able to capture fee-based transaction with richer data availability that correlates to business performance of the customers. Besides, alternative data will be used as the part of credit scoring. Eventually, with all data availability, the credit model can have a sound risk management to give the right amount of loan limit to the right customers.