The Importance of Growing a Banking Ecosystem to Provide Holistic Financial Services and Solutions for Society

Kapanlagi.com - In the economic dynamics of a country, banks play a crucial role in driving the economy and supporting activities across various sectors. However, with the advancement of technology and the digital world, the banking industry faces various challenges. This is where the role of banking in fostering an ecosystem becomes important to provide comprehensive services and innovations that meet needs.

This is a key point conveyed by the Chief Strategy Officer of PT Bank Danamon Indonesia Tbk, Reza Iskandar Sardjono, in his opinion column published in Bisnis Indonesia. In his analysis, one of the key figures of Danamon and its corporate group provides several notes for the banking industry to present holistic financial services and solutions tailored to the needs of society as a strategy to survive in the modern era.

The Presence of the Fintech Industry: Challenges and Opportunities for Banking

According to Reza, as quoted from Bisnis Indonesia, both banks and the non-bank financial industry (IKNB) play significant roles in the economic dynamics of Indonesia, as reflected in the large assets managed. He mentioned that data from the Financial Services Authority (OJK) indicates that the assets of the national banking industry reached Rp12,210.18 trillion as of July 2024. Meanwhile, the non-bank financial industry (IKNB) manages assets worth Rp3,369.61 trillion as of July 2024.

In the IKNB itself, technology-based financial services, known as financial technology (fintech), have also increased significantly over the past 6 years. The growth rate of managed assets has even surpassed that of traditional banking businesses.

In his quote in Bisnis Indonesia, Reza mentioned that fintech is capable of reaching new markets that intersect with banking businesses. This poses challenges and opportunities as banks strive to create superior services.

“One of the advantages of implementing a digital strategy is differentiation. This differentiation becomes the key to ensuring that the digital innovations implemented can meet the specific needs of customers,” said Reza, as quoted from Bisnis Indonesia.

Ecological Approach for Comprehensive Services

In his opinion column in Bisnis Indonesia, the figure who joined Danamon in 2015 highlighted the importance of adopting an ecosystem approach as a strategy for business growth in the increasingly modern banking era. This aims to provide more comprehensive services according to customer needs. He also revealed that there are 2 meanings of ecosystem that need to be understood in this strategy.

First, the ecosystem of a particular industry or entities that form an end-to-end value chain, including reaching retail customers. These entities can include large, medium, and small-scale companies, employees of the company, and individual customers.

“An example of an industry ecosystem is the service to the automotive industry ecosystem. In addition to meeting the financing needs or working capital credit facilities or investment on a large scale to automotive manufacturing, banking also has the opportunity to reach the needs of distributors, dealers, spare parts suppliers, vehicle accessory service providers, and even the financial needs of consumers buying cars or motorcycles. This is done end-to-end, from upstream to downstream,” he explained as quoted from Bisnis Indonesia.

Banks that can adjust their products to the needs of a particular industry ecosystem will have a superior value proposition for customers in that industry. However, Reza also emphasized that not all ecosystem needs of customers can be met by banks. This is where it is important to cultivate the second ecosystem, which is the financial group ecosystem.

“This happens where services for customer needs are provided in an integrated manner not only by banking, but supported by collaborations with other entities, both within the same financial group and with partners including IKNB companies, technology start-ups, and beyond banking services,” said Reza in his quote in Bisnis Indonesia.

By leveraging the financial group ecosystem that has the advantages and technologies of each member, this can provide more comprehensive, unique services that meet the needs of the targeted industry ecosystem.

Holistic Financial Services and Solutions like the Approach of Danamon and Its Corporate Group

Reza continued his explanation that the financial group ecosystem is capable of presenting more holistic financial solutions and adapting to the needs of its customers. If adopted by banks, it will give their business a competitive advantage or unique value proposition.

“In addition to obviously enhancing the bank's business, this ecosystem strategy also benefits society with efficient, innovative, and holistic services,” Reza continued as quoted from Bisnis Indonesia.

He elaborated further that the ecosystem strategy implemented by the bank covers various aspects, ranging from working capital financing and investment financing that are usually carried out by large and medium-sized enterprises, to financing in the consumption sector, payment needs, cash management, and even technology needs and beyond banking services.

The ecosystem strategy as explained by Reza is what becomes the approach of Danamon in collaboration with MUFG as the parent company and Adira Finance, Zurich Asuransi Indonesia, and Home Credit Indonesia as its corporate group. As information, Danamon and its corporate group implement an ecosystem growth approach by offering global and local networks as holistic financial solutions tailored to current customer needs to Grow Together with Danamon Group.

Starting from Danamon together with its subsidiary Adira Finance, which is committed to advancing the automotive ecosystem in Indonesia through financing various brands and types of vehicles, both conventional and electric. Adira Finance itself offers a diverse portfolio of automotive financing products for both new and used vehicles, as well as non-automotive financing solutions to meet various financial needs of the Indonesian people.

In addition to Adira Finance, there is also Zurich Asuransi Indonesia. Together with Zurich Asuransi Indonesia as a leading insurance service provider, Danamon Group is committed to protecting its customers by providing ease in purchasing policies and ensuring a simple, easy claims handling process that meets customer needs.

Furthermore, Danamon along with Home Credit Indonesia as a technology-based financing company with a wide partner store reach of more than 22,000 points in 221 cities in Indonesia, Danamon and Home Credit Indonesia are present to provide affordable financing access for Indonesia.

Danamon and its corporate group stand under the umbrella of MUFG as their global parent company. Danamon together with MUFG and the group also collaborate in the field of venture capital named Garuda Fund. Every entity is re-optimizing its potential to synergize and collaborate into a Single Financial Group that provides holistic financial solutions tailored to the needs of each customer.

"A comprehensive perspective from an ecosystem approach will help drive the economic wheels of all equally important segments," continued Reza as quoted from Bisnis Indonesia.

At the end of his opinion, Reza emphasized that the execution and focus of banking determine its business direction, which affects the success of banks in implementing this ecosystem approach.

"Only banks that deeply understand the needs of the ecosystem and successfully form the right financial group and partnerships can succeed in applying ecosystem strategies," he stated, concluding his opinion column in Bisnis Indonesia.

(adv/wri)