Bank BRI: Accelerating Financial Inclusion with Apigee
Editor's note: Today we hear from Kaspar Situmorang, head of digital at Bank Rakyat Indonesia (BRI). Bank BRI was founded in 1895 and is one of the largest banks in Indonesia. Learn how Bank BRI is undergoing an organization-wide transformation to digitize its core functions, build a digital ecosystem, and improve access to banking services across Indonesia.
Bank BRI is the biggest bank in Indonesia by assets, and last year we were also the most profitable. We’re the only Indonesian bank with satellites all over the globe. As a government-owned enterprise, we have more than profitability as our mission, though—we’re tasked with aggressively increasing financial inclusion among our user base.
To accomplish this, we’ve been undergoing a complete digital transformation to reach as many previously unbanked and underbanked people as possible. We’re charged with bringing financial inclusion up to 60-70% by 2019 from the current levels of around 40%, so it’s a real challenge and we need to use all the tools at our disposal.
When I was recruited to Bank BRI, I was working in Silicon Valley (not too far from Google headquarters). I had learned a tremendous amount about technology and business and the value of collaboration while living in California. I had already come to appreciate the power of APIs and the value of Apigee, and I was ready to bring back my expertise to Indonesia.
Three pillars of digital transformation
When I joined the bank about a year ago, we came up with a framework for digital transformation in three phases. We would digitize our core first, then our digital ecosystem, and finally, build new, pure digital banking apps that revolve around the needs of our customers.
In terms new applications, we’re having a lot of success with our Apigee platform in terms of building and managing new API-based apps. Our developers love it for the ease of use, and as a manager I can feel confident in the high level of reliability and security and real-time visibility that Apigee gives us.
Our network of over 320,000 “branchless agents” around Indonesia—particularly in the more rural eastern part of the country—is now enabled through our API-based apps to do cash-in and cash-out transactions. They can pay billers as well as offer a variety of services specific to different regions of Indonesia. This greatly helps to accelerate the number people who go from not having banking services to using a bank.
We’re seeing a lot of startups beginning to work with expanding financial inclusion in rural regions. However, they don’t have the licenses to do payment engines, and we’re able to help them by extending our API payment engine to these services.
We’ve also managed to completely digitize our extensive microlending business. Where previously our account officers used pen and paper, now they use an app on their smartphones, with all the necessary integrations using APIs on our backend. For example, credit scoring, fraud detection, early warning, and loan origination all call through the Apigee gateway, seamlessly between the back-end and front ends. This might seem basic, but for Indonesia it’s been a huge transformation.
We’re working to an incredibly aggressive timeline, but we plan to have all of these integrations complete, including payments, with all of our pre-Apigee APIs ported over to the platform, by 2019! By that time, we will have 120 APIs exposed. We’re doing it with our team of 120, with 80 developers, working more efficiently, thanks to the elimination of manual integrations.
Expanding financial inclusion
The main areas the bank is targeting for expanding financial inclusion align perfectly with those areas of banking that best lend themselves to API integrations. We’re initially concentrating on payments, loans, and billers, in collaboration with our partners, to achieve the goals set for us by Bank BRI’s largest shareholder, the Indonesian government. We’ve also been adding satellite offices in underserved areas around Indonesia. So, from an infrastructure standpoint, we’re in good shape.
Part of my role in leading digital transformation is also to push forward a cultural transformation, to bring the lessons I learned in Silicon Valley about the value of collaboration with external partners—partners and competitors alike—to Indonesia, which has room to grow in this area. APIs are the perfect vehicle for showcasing the value of external partnerships.
Again, as a government-owned enterprise with a social mission as well as an economic one, we want to lead the whole nation in digital transformation. By working with our outside partners on API integrations, we have the opportunity to accelerate financial inclusion across the board, not just through Bank BRI. We want to digitally enable the whole nation by sharing our APIs for payments, virtual accounts, ATM locator, and so forth so that everyone can use them. As an example, we’re the only company in Indonesia using WhatsApp for enterprise with our digital assistant, Sabrina, which already has a lot of API integrations.
Fully compliant on-premises solution
When I was searching for the best API solution for Bank BRI, a couple of factors were important. First, any platform that we considered had to be available as an on-premises solution as the Indonesian government mandates that banks not store data in the cloud. Secondly, the top position of Apigee as a leader in the Gartner Magic Quadrant in Full Lifecycle API Management reinforced my assessment that Apigee was the right platform for us. Fast forward to today where we’ve recently finished installing 15 Apigee nodes to handle around 100,000 transactions per minute on our network.
Measuring financial inclusion success
With such aggressive goals for increasing financial inclusions, we have to be precise about how we measure success. We look at three areas: the number of new customers that we’re able to bring to the Bank BRI platform; the percentage of overall financial inclusion rates as it relates to our goal of 60-70%; and, finally, “fee-based income,” which, in banking parlance, means that we measure the success of APIs in terms of payments and loans transactions enabled by our APIs.
We also have an informal measure of success based on service level agreements (SLAs) for integrations. Previously at the bank this was a manual process. Every time a third party wanted to connect with the bank they had to go through IT, and it could take up to four months to complete an integration. Now, with Apigee, we’re talking about completed integrations in a matter of days. Partners go from testing to production to contracts to live in only two days now, which is a huge success for our digital transformation effort.
Keep checking in with Bank BRI—we have a lot of surprises in store!