Determining Factors for Success of Banking Digital Transformation

DOI

10.2991/aebmr.k.200812.041How to use a DOI?

Keywords

the digital tranformation playbook, collaboration

Abstract

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 “Cash Burn” 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. Based on the Digital Transformation Playbook by Rogers, the bank 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 “Cash Burn” strategy are also provided. 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. The Disruptive Business Model Map by Rogers is used as a strategy map. The elements contained in the strategy decision tool written by Rogers, namely The Disruptive Response Planner are used to choose the best decision. 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 employees 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. The bank has also collaborated with all fintechs in topping up of their digital money application and collaborated with customers to fulfil what they actually need. In addition to collaborating with consumers, including fintechs, there are 2 things that the bank 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.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Andi Ilham Said
AU  - Maria Angelita
PY  - 2020
DA  - 2020/08/13
TI  - Determining Factors for Success of Banking Digital Transformation
BT  - Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019)
PB  - Atlantis Press
SP  - 238
EP  - 241
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200812.041
DO  - 10.2991/aebmr.k.200812.041
ID  - Said2020
ER  -