Key Drivers for Indonesian Banks' IT Strategy 2017-2020

Digital Transformation (DX) framework for the long-term journey

 What key external drivers (from a bank's perspective) should be considered in creating IT Strategy by Indonesian banks for 2017-2020? The answer is that 3 main external drivers: Technology; Regulatory and Security; and Competitor or Banking Landscape. Those drivers can be analyzed from the technology and industry trends and predictions in global, regional, and Indonesia. The drivers will relate to several important topics such as Digital Banking, Online Payments, Fintech startups, 3rd Platform, Innovation Accelerators, and Digital Transformation framework.

 One of phenomena observed is reflected in the following quote: "Most of Indonesia banks has started their digital banking journey by providing internet and mobile banking to customers, but they don't have a Digital Transformation (DX) framework for the long-term journey. The framework is very important for the banks to deliver reliable and consistent products and services. One of the other important things is the differentiation from others and keeping their customers. For those things, the banks should build technologies supporting CRM (Customer Relationship Management) implementation."

 The Digital Transformation (DX) represents the best way for Indonesian banks to prepare to respond to rapidly changing customer behaviors and market conditions. At the root of DX is the acknowledgment that front-office experiences (Omni-Experience DX) must be enabled by enterprise-enabling process and information (Operating Model DX and Information DX). And in order to accomplish these enabling technologies, commitment from the C-suite and board (Leadership DX) must drive organizational change to ensure that internal staff and external partners (WorkSource DX) have a vested interest in the long-term success of the institution. Those banks that are able to reach the level of optimized maturity will break business barriers and create new opportunities for growth. The first step that the banks should do is that conducting the assessment for the bank's level of maturity and capability in each of the five dimensions of DX covering: Leadership, Omni-Experience, Information, Operating Model, and WorkSource.
  • Leadership Transformation is related to: improving AWARENESS and INSIGHT of business ecosystem; employing INNOVATION of business model; fostering enterprise-wide CULTURE that quickly adopts governance and organizational changes; adopting AGILE method for PLANNING and governance; driving organization’s FUNDING and VALUATION criteria based on enterprise-wide digital strategies.
  • Omni-Experience Transformation is related to: transforming the way people COMMUNICATE with each other and with the business products and services.
  • Information Transformation is related to: extracting and developing THE VALUE AND UTILITY of information relative to customers, markets, transactions, services, products, physical assets, and business experiences.
  • Operating Model Transformation is related to: making business operations more responsive and effective by leveraging DIGITALLY CONNECTED products/services, assets, people, and trading partners.
  • WorkSource Transformation is related to: optimizing the PRODUCTIVITY AND FLEXIBILITY of the internal and external contributors to organizational value; identifying the RIGHT RESOURCES to achieve business objectives; driving business outcomes by creating a MODULAR, AGILE STRUCTURE; facilitating RELATIONSHIPS; maximizing the productivity of INTERACTIONS.

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