Telkom hire bolsters Bank Rakyat Indonesia’s fintech cred
(14 March 2017 – Indonesia) In a move to ward off increasing competition in fintechs, Bank Rakyat Indonesia has appointed an executive with the country's largest telecommunications company to its board.
The state lender's shareholders approved the appointment of Indra Utoyo, who serves as director for innovation and strategic portfolio at state-owned Telekomunikasi Indonesia, or Telkom.
Utoyo has overseen Telkom's digital business development -- including the operation of venture capital arm MDI Ventures, which has an office in Silicon Valley and runs an incubation program for Indonesian startups.
BRI must continue to adapt to "challenges and changes in the market, where the [boundaries] are disappearing between the banking sector and the telecommunications sector," Sunarso, the bank's vice president, told reporters. "They increasingly overlap each other."
He added that the bank, whose focus on microfinance made it the top profit earner in Indonesia's banking industry last year, also discussed establishing a venture capital unit geared to microbusinesses.
"BRI will stay focused on the micro, small and medium segments," Sunarso said.
"Among the challenges in the fintech industry is how to lower prices by improving efficiency -- which requires digitalisation."
BRI has maintained a dominant market share in loans to small businesses by running a network of more than 10,000 offices across the country. This way, it caters to the needs of local communities.
In 2016, it launched its own satellite to support its outreach to Indonesia's remote regions, as well as its efforts to go digital.
BRI's advantage of physical presence is being put to the test by competition in the mobile space. Bank Mandiri, the largest state-owned bank by assets, set up a venture capital unit in 2015 that has made a series of investments in startups that provide financial services to small businesses.
"We want to be able to work with third parties that will enable us to expand in new technologies," Bank Mandiri Director of Finance and Treasury Pahala Mansury told reporters on Tuesday.
Bank Central Asia, Indonesia's largest private bank, also announced the establishment of a $15 million venture capital unit in late January.
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