DETERMINING FACTORS FOR SUCCESS OF BANKING DIGITAL TRANSFORMATION
Maria Angelita, Andi Ilham Said
Sekolah Tinggi Manajemen PPM, Jakarta, Indonesia
widjajamariaangelita[at]gmail.com
Sekolah Tinggi Manajemen PPM, Jakarta, Indonesia
andiilhamsaid[at]gmail.com
Abstract
PURPOSE / AIM & BACKGROUND Banking industry in Indonesia are facing a problem in the decline of their payment services customer because new financial technology companies (fintech) give continuous discount in their “burn money” strategy to seize banking market. A bank in Indonesia who has seen their payment customer growth decreased, a fact which forces the bank to start a digital transformation. One of the many benefits of the transformation is reduced operational costs (King, 2018). Based on the Digital Transformation Playbook by Rogers (2016) they needed to review their strategic thinking in 5 domains, namely CC-DIV (Customer, Competition, Data, Innovation, Value) and increase their organizational agility. The research is limited to the first part, i.e. Strategic Thinking. Recommendations for the bank in dealing with the fintech-s “burn money” strategy are also provided. METHODOLOGY To measure the readiness of employees in facing digital transformation surveys are carried out and distributed to all employees. The gap analysis at the company-s current condition vs ideally transformed was carried out by mixed research method, which consists of surveys, observations, and interviews (Sekaran & Bougie (2016)). The Disruptive Business Model Map by Rogers (2016) is used as a strategy map. The elements contained in the strategy decision tool written by Rogers (2016), namely The Disruptive Response Planner are used to choose the decision. FINDING / RESULTS Digital transformation readiness questionnaire results showed that 2/3 of employees stated that the company was ready for digital transformation, while 1/3 still doubted readiness in all strategic thinking domains of CC-DIV. This result was further confirmed by interviews. From the observations it was found that the company had previously collaborated with fintech so that they remained relevant to the conditions needed by customers. The Application Programming Interface became the new business model of that bank to on which new channel and revenue stream were generated. Meanwhile, that bank has already put in place sharing programs for employess of the changing conditions from the analog to digital era. To maintain long sustainable profit they have been socializing the importance of a lifelong learning culture to be kept up to date with customer needs. They have also collaborated with all fintechs in topping up of their digital money application and collaborated with customers to fulfill what they actually need. CONCLUSION In addition to collaborating with consumers, including fintechs, there are 2 things that they can choose in facing digital giants, i.e. becoming disruptors themselves or by making their mobile application as a platform business model for all fintechs and existing old-fashion business models REFERENCES 1. King, Brett (2018), “Bank 4.0 : Banking Everywhere, Never at a Bank.” Singapore: Marshall Cavendish Business. 2. Rogers, David L. (2016), Th
Keywords: The Digital Transformation Playbook, Collaboration
Topic: Strategic Management