Indra Utoyo: Initial Integration of Allo Bank Targeting Retail Ecosystems and CT Corp's "Supply Chain" (Part II)

This is part II of two writings. Part I presents ideas, perspectives, and flashbacks of Indra Utoyo who successfully built a career from the telecommunications and banking industry.

Why did you decide to take CT's proposal to lead Allo Bank?

Answer: Lots of offers came in, some from non-banks that weren't background I. Since I'm 60 years old, learning new things is not in line with what I've been doing all along. Except when I was younger, maybe I took the offer.

When there was an offer from Mr. CT, I saw that this was in line with what I was thinking about going forward. Moreover, Mr. CT has been preparing for Allo Bank for a long time. Since the direction of digital bank development is ecosystem, I think entering the CT Corp ecosystem is the right combination.

The application-based banking platform is combined with a business network that has physical interactions. This is interesting because CT and Allo Bank shareholder both have extensive ecosystems. Bukalapak is one of them. Commitment customers will be better able to use Allo Bank for life's utilities, such as the name Allo which means "All in One".

There is a lot of Allo Bank exploration space in O2O. Physical and digital presence both have a strong role. As an ecosystem, [CT Corp] already has it trust, just add a digital bank.

Indeed, digitalization has a positive impact on speed and efficiency. But, aspect human touch is also important because society still needs it. How to combine these two things? Need hybrid models to combine conventional and digital aspects. The term 'phygital' or physical-digital. This model will be much more commits with consumers.

If fully digital, definitely [development] will stall. In my book ("Hybrid Company Model: How to Win in the Disruptive Digital Era"), I said that digital cannot replace trust, brand, and service. However, without digital, we won't be able to get all three.

What is Allo Bank's early stage focus this year?

J: We will start [integration] from B2C in the retail sector and B2B in supply chain leaders. I think in the first two to three months there will be a lot of [collaboration/integration] in the category brick and mortar. As Allo Bank continues to improve its platform, operations and data processing, we will integrate into CT Corp's digital ecosystem which is already ready, such as AlloFresh. Also later to Bukalapak, Grab, or Traveloka.

By expanding the ecosystem connected to Allo Bank, we can increase the number of customers and transactions. We will add other features or products, such as paylater or instant cash. The more frequently we use it, we can understand consumers and maximize quality banking products with the right customers.

Allo Bank is still new and has a long way to go. '"All in One", it's become a kind of mantra yeah, one for all and all for one. Everything can be accommodated through the CT Corp ecosystem.

How is Allo Bank positioned compared to its competitors?

J: Allo Bank plays on mass market, the transaction volume is small but frequently used. Regarding bank products, they are the same as those offered by other banks. There are savings/deposits, transfers and credit, it's just the context of the business model that will differentiate.

Allo Bank will combine CT's business network and strategic partners, both those who own shares and new partners later. With this [strategy], Allo Bank will be in a position to grow.

From the team side, we will combine what we do alone and what we do with partners. In terms of technology, Allo Bank collaborates with the world's largest digital bank, WeBank. We follow discipline in WeBank product development. Second, one of the directors of Allo Bank is a former Paytm official (Sajal Bathnagar), a large digital payment platform in India.

We learn with this approach, learning from the greats as we continue to add core talent. If we think about everything ourselves, we can get lost. So we studied and nurse Good local human resources.

Are there any plans to continue? venturing digital ecosystem by forming VC?

J: I can't say anything about this because it is in the central domain. There must be an agenda because we will look for new partners. Soon, Allo Bank will add features or products, ranging from insurance to investment. Of course this will [partner] with startups that already have a user base and will be connected to Allo Bank.

How do you see the dynamics of digital banks in Indonesia?

J: There are three things you can do driving sebagai digital bank, namely technology, ecosystem, and talent. In recent years, digital banking has emerged as a [business] model. Bank deliver service via application. In the beginning there was Jenius, then finally there was Jago, Neo Commerce, and Seabank who played with the ecosystem.

Digital banks combine ecosystems to get quality customers, because banks talk about trust and risk management. [Ecosystem] has trust and Branding so that it has a quality customer base. If we don't [integrate the ecosystem], it will be difficult for digital banks to grow organically and get quality customers. So they are create value together.

Game fields Next, digital banks encourage people to become more financially literate, so they can reach a wider community. If we look, digital banks no longer talk about banks, but more about aspects of life.

Therefore, digital banks are suitable for retail to SME, playing in large volumes. With efficient technology, digital banks can have cost per acquisition which is very low. Banks can offer services that target everyday needs. Above that, digital banks don't really play there. Conventional banks usually play in the corporate segment with large transaction values.

Meanwhile, if you see the [phenomenon] of fintech entering the banking business, this is the end of their journey. Banks get margin from financing, if from payment there just isn't any. That's why fintech has to shift to banks so they can offer other financial services.