Bank Raya: We Want To Encourage "Gig Economy" Workers To Upgrade

In an exclusive interview DailySocial, President Director Kaspar Situmorang quite a lot highlights asset and liability management as a manifestation to transform to serve workers gig economy or informal workers. He has a long-term mission, which is to raise the class of perpetrators gig economy, be it food stall owners, traders, or salon workers.

Kaspar, who previously served as EVP of BRI Digital Banking, seeks to harness the power of the parent company's ecosystem to achieve this mission.

How is the strategy and product development done change identity become a Bank Raya?

How is the transformation process of Bank Agro to Bank Raya?

Answer: This transformation began with the idea of ​​Sunarso, President Director of BRI, to carry out the digital transformation of BRIvolution. Goalher is go smaller, go faster, go shorterand go cheaper. Serve as much as possible at the lowest possible cost.

There are two transformation objects [BRI Agro], namely digital and work culture. Mr. Sunarso has been planning these two things since 2017, at which time the execution was carried out together with Mr. Indra Utoyo as Director of Operations and Information Technology and the Digital Center of Excellence (DCE). We prepare human resources, technology and data. Mr. Sunarso asked whether we were ready, because at that time the competitors had already started walking. Because Mr. Indra Utoyo said he was ready, the decision was taken in April 2021 to pivot Agro becomes BRI's digital bank.

Agro's identity changed to Raya in April 2021. The focus became digital attacker BRI Group to be able to maximize digital banking services. [Account] opening, loans are done digitally. There is no human in the middle.

How is the transition leadership Are you going from BRI to Bank Raya?

J: I learned a lot about leadership from Pak Sunarso and Pak Indra Utoyo. They teach leadership it should by example, have framework, and framework of thinking. So don't make it up. Leadership must have competence in knowledge, skills and behavior. Without these three you can't do it. So, we must be able to fit character and leadership model according to the company and its ecosystem. I feel fit with ecosystems because you learn from them.

Mr. Sunarso also created leadership space for the younger generation who work in the BRI Group in its subsidiaries, be it Raya, Pegadaian, or PNM. They are placed there for sharpening problem solving, strategic thinking, as well as execution.

How framework Kingdom transformation?

J: BRI has it framework digital transformation that focuses on the pillars of exploitation and exploration. On the exploration side, digital banks are outcome as business potential and revenue streams new for the BRI Group. That way we are not disrupted. BRI also sent several dozen people from the Digital Center of Excellence (DCE) division to Raya, including me, to build products, IT, databases and security faster.

After Bank Raya was established, we simplified it framework into three pillars; digital, digitizeand revamp. The digital pillar focuses on developing financial products, savings or loans, collectively end-to-end. Pillar digitize focus on business process because previously it was still spelled out toxic. We fix everything so that this digital business model can run smoothly. Many processes in banking must be digitized to make this possible align with the first pillar.

Pillar revamp is rearranging business legacy. Bank Raya is not a new item that [after transformation] is ready to run. Previously, Agro played in the palm oil sector. Then, we stopped corporate credit and reorganized it. Some branches have been closed, some have been converted to optimize costs. Mainly, so that [transformation] is in aspects people and work culture can be maximized.

The financial aspect is outcome, but underneath there are customers, business process, and people. If you have-retrain, rescale, they can serve customers, because this is a service business.

Why target the market gig economy?

J: Raya's vision and mission is to become house of fintech and home for gig economy. Why? By having better asset and liability management, gig economy will grow even more. BPS data in 2020 shows that there are around 46 million informal workers without pay slips. The projection is to increase to 74 million in 2024. This is our hypothesis for serving workers gig economy.

To understand banking, we have to study the tree of knowledge, namely asset and liability management. Whatever the bank, be it a digital bank, a bank hybrid, or sharia banks, all will focus on those two things.

In the past, Agro had short-term funds and savings, but long-term credit. Corporate credit has a tenor of 5-10 years. However, all funding sources are short term, 3 months. This is difficult. That's why we are transforming Raya by changing its asset and liability management. Long-term loans are converted into daily with monthly funding sources.

We survey to validate the problem. These workers need cash on short credit. Payment is deducted when payday. So, daily credit [needs] and monthly funding sources match with the labor market gig economy which we aim for through our digital savings and loan products. This is an interesting thing that is happening in our era. Without market validation, needs, and user experience, developing something will have no focus.

Then, why house of fintech? When we were EVP at BRI, we received the mandate to build BRI Ventures with initial capital of IDR 1,5 trillion. We start investing in early to early stage startups unicorn because we see that disruption will come from non-banks. So we have to dive into the way of thinking.

From here we see how Raya metamorphoses into a platform. Whatever service is in Raya, it must be able to metamorphose into a platform that we call Raya API. We believe through open API, we can integrate the ecosystem. Raya collaborates with BRI, that's how we knit the ecosystem together.

How to utilize BRI's ecosystem?

J: We learned from WeBank and KakaoBank, who already profits, that the ecosystem is the key to success. Without it, it is impossible to play in digital banking. If you become a bank hybrid, cost of acquisition high and customer life teame not long. So, the ecosystem is a fixed price. Therefore, BRI has mandated the BRILink ecosystem to be managed by Raya, both in terms of asset and liability management.

Apart from that, banks, especially digital banks, if you wish survive must have a specific strategy for asset and liability management. From a banker's point of view, a bank without these two things is doomed to failure. We apply this principle internally to create product excellence. I see many banks in Indonesia [offering] loans with annual terms, but short-term funding sources. There's no daily like us yet.

We were entrusted by BRI to resolve the liquidity issues experienced by BRILink agents through PINANG loans. They have a lot of cash, but their BRILink balance is small. So, it is difficult to make transactions because there is no balance. When I wanted to deposit money, the bank was already closed. Therefore, this bailout fund can be used for immediate needs. There are approximately half a million BRILink agents in Indonesia.

Bank Raya has distributed almost half a trillion disbursement to 12.000 BRILink agents. Our target is to acquire 50.000 BRILink agents. The integration is complete seamless pattern so BRILink agents don't need to change the application because PINANG already has it embed in the application. This asset and liability management transformation model is translated into API and web view with BRILink as one of our partners.

What is the Bank Raya user profile? What features will be provided?

J: We see that the profiles of Raya savings users are already digitally literate. In 2020 there are many lay off workers due to the pandemic. According to BPS data, those affected lay off utilize many applications on smartphones to earn income. For example, online motorcycle taxis or selling online. That is, workers gig economy these are productive workers who utilize smartphones.

gig economy very broad. We divide our target market into three categories, namely F&B, retail and services. From these three sectors, we try to develop features according to their needs. Hopefully we can release it this year. We can't yet share many, but this feature is related to payroll. We want to help workers gig to go to class. It would be a shame if they couldn't apply for a motorbike loan or mortgage just because they didn't have a pay slip. This is what will transform the market gig economy in Indonesia.

Raya too synergizes with the BRImo application for opening accounts. We have permissions that enable users to have saved depositsembed in the BRImo application. So, customers don't need to leave the BRI ecosystem. This is why we are asked to be digital attacker BRI so you can leverage own strength.

We are also synergizing to withdraw/deposit cash at all BRI ATMs without cards which [launches] in August. Transactions only use the application and use tokens. We will direct you to Raya cardless and cashless with payment using QRIS. Apart from that, we plan to enter loan products with BRI on a regular basis cardless. We do not apply for permission as issue so we use BRI [license] as issue.

All this came to be pintu enter BRI. Once the Raya savings user base has been established, they can upgrade to loans above IDR 1 billion, for example. This will be us refer to BRI.

How do you see the current digital banking competition?

J: Each bank has its own advantages and ecosystem. Our homework is how to transform asset and liability management with discipline in execution. The keywords for success are those who are the most disciplined, fastest, and most consistent in creating sustainable excellence. In banking this means cost of acquisition lowest with customer lifetime value the tallest.

This also includes how the media can educate the market that digital banks don't just talk about valuation, but create added value from the ecosystem that is entrusted to us.