Bank Rakyat Indonesia (Bank BRI) is one of Indonesia’s largest banks with over 10,000 offices across Indonesia and is the biggest microfinance lender in the ASEAN region. Founded in 1895, it is the oldest bank in Indonesia, catering to approximately 30 million retail clients through over 4,000 branches, units, and rural service posts. Bank BRI is focused on increasing financial inclusion among unbanked Indonesians.

Finacle is the industry-leading digital banking solution suite from EdgeVerve Systems, a wholly owned product subsidiary of Infosys. Banks in more than 100 countries use Finacle to service more than a billion consumers and 1.3 billion accounts. Finacle offers a cloud-agnostic and componentised digital banking solution suite that spans the entire stack covering digital business engines, digital engagement, and digital experiences suite.

Project scope: Develop a consumer-centric lending platform.

Bank BRI wanted to extend its services to help millennials develop more financial security, grow their wealth, and build a credit history. To achieve this, the bank decided to implement an accessible digital credit product designed for Indonesian millennials. The product would be used to purchase goods from e-commerce and allow anyone to borrow up to IDR 20 million ($1,400) with various loan terms up to 12 months.

The implementation would involve the deployment of the Finacle Lending Module, a component of Finacle Core Banking, along with Finacle Digital Engagement Hub to enable it to build effective digital-first lending propositions. The bank also planned to develop digital customer journeys from scratch and established an AI-based analytics foundation to power its digital vision.

Implementation process: Digitising Lending and Payments Products

Bank BRI wanted to create a BNPL (buy now and pay later) and payments product to fast track the credit process and disburse loans in just minutes. One of the key challenges was facilitating consumer credit digitally, without visiting branches, with the same quality of loans disbursed. The bank also wanted to create an ecosystem that brought greater convenience for both commerce and banking by bringing together the stakeholders who contribute to the entire value chain onto their digital platform. The bank partnered with Infosys Finacle to achieve its twin objectives of leading the digitisation wave and driving greater financial inclusion in Indonesia. The result was a digital lending and payment product, Ceria.

Ceria has a pay later feature and has developed in partnerships with Tokopedia (e-commerce platform), Panorama Tour (travel agent), Dinomarket (e-commerce), and Garuda Indonesia. To apply for Ceria, a user needs to have an account with Bank BRI and at least IDR 3 million in monthly income (roughly around $307). Users may get up to IDR 20 million (around $1,400) as their credit limit. The verification process is done online and is relatively easy, requiring an ID Card, Bank BRI debit card, and a payslip. Ceria can process loans by self-service and have an end-to-end automated loan process, including credit scoring, e-KYC process, digital signature, and document signing from the app. With credit scoring carried out in less than 2 minutes, offering a convenient and speedy experience for loan disbursal and repayment, Ceria has the fastest credit approval in the market.

This project required integrating multiple systems to facilitate loan disbursement with a click of a button. The bank and Infosys Finacle had to integrate ten systems to completely automate the loan disbursement.

For Ceria, the bank used a custom-built Android native app using native technology with Finacle Omnichannel Hub (OCH) that served as the platform on which the app was built and with loans resting on the Finacle Core Banking Platform. Pinang and Ceria leveraged biometrics for eKYC and Digital Signature for document signing. Finacle OCH had to be integrated with multiple solutions for this project. It was integrated with CAMS and Silverlake for customer and account inquiries. SMS aggregator Whitelist was connected for delivering OTP, OCR system for e-KTP (Kartu Tanda Penduduk Elektronik – identity card). Additionally, it was integrated with Element for e-KYC, Privy for digital signature and document signing, and a credit scoring system. Finacle core was used for CIF and loan account maintenance, with all integrations handled through Google Apigee.

While there were already many local payment gateway solutions, mobile wallets, and BNPL credit options with low credit limits in the market, Ceria marks a milestone in terms of big data for Bank BRI, as the app enables the lender to successfully offer an end-to-end process of loan origination all the way to loan facilitation. The app also allows the bank to effectively conduct credit scoring and prevent defaults.

Another feature was that Ceria had the technology to provide a cash loan feature that becomes digital lending with full banking features. The advantage of this cash loan feature allowed customers to transfer their existing credit limit at Ceria directly to Bank BRI personal accounts. Ceria was targeted towards technology-savvy millennials who were Bank BRI customers living in big cities, looking for financing for lifestyle needs. On the other hand, Pinang primarily targeted blue-collar employees in Indonesia who were using BRI Payroll.

Challenges faced: Covid-19  slowed the implementation process

Various challenges during 2020, such as the Covid-19 pandemic, rapid technology development, and internal challenges, have led to the bank’s adjustment on a long-term plan to performance achievement strategies. To that end, Bank BRI has reviewed and developed Corporate Plan 2021-2025, further named BRIVolution 2.0.

Benefits: Digitised verification process and increased reach of financial services

With Ceria, the bank could penetrate rural regions without the need to have a bank branch. By reducing dependence on the verification process by branches, the solution promoted ultra-fast micro-lending. Ceria is recording exponential growth, with up to 2,500 new customers and new credit facilities of approximately IDR 11 billion ($758,000) per day.

Despite the challenges faced due to the Covid-19 Pandemic, Bank BRI was able to consistently deliver good performance, demonstrating its commitment to grow and progress with Micro, Small and Medium Enterprises (MSMEs) in difficult times. Bank BRI extended its effort to revive MSMEs impacted by the pandemic and actively serves as the Government’s main partner in fostering the goal of National Economic Recovery (NER) to deliver positive impact not only for customers but also for the Indonesian economy.

Conclusion

This case study showcases the power of digital channels like apps in improving financial inclusion, especially in developing economies like Indonesia, with a young technology-savvy but underbanked population.

Key Facts

• Bank: Bank Rakyat Indonesia
• Bank Headquarters: Jakarta, Indonesia
• Founded: 1895
• Vendor Name: Infosys Finacle
• Solution Implemented: Finacle Omnichannel Hub & Finacle Core Banking Platform