2018 Indonesia Banking Survey: Technology shift in Indonesia is underway
Technology is the recurring theme coming out of our 8th Indonesia Banking Survey. Respondents said technology is the #1 driver of business transformation and the top risk to the industry. Transactions through digital channels are surpassing traditional branches in Indonesia for the first time. The war for talent is strongest for technology specialists.
Indonesia Banks are trying to keep pace with this change: only 8% of respondents said their bank has the same strategy as they did 18 months ago. Almost half have significantly changed their strategy in that time period. 9 out of 10 are undergoing some form of a cost reduction program, and the most common approach to reducing operational risk is automation.
The outlook is improved for 2018 over last year, but cautiously so. Concerns about credit risk and net interest margins are subsiding, and there are improved expectations for profitability.
There will be winners and losers in this rapidly changing environment. We see areas where Indonesia banks need to take more action –clarity of strategy, a greater focus on customer centricity, driving strategies through to execution, and investing further in systems and risk management to move from a moderate to high level of preparedness.
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