Digital Transformation

Trends, Strategy & Initiatives

DIGITAL TRANSFORMATION driving TECHNOLOGY INVESTMENTS

Source: https://www.idc.com/itexecutive 2
© IDC, 2018
 *CAGR 2017-2022

3rd Platform
▪ Banking 13.2%
▪ Insurance 11.4%

▪ Banking 22.5%
▪ Banking 4.3%
▪ Insurance 21.9%
▪ Insurance 2.7%

………and finally, embedded itself

In just a few short decades, information
technology (IT) has moved from the back
office, IDC's 1st Platform, to the front office,
the 2nd Platform........
into nearly every aspect of people's
business and personal lives, fueled
by 3rd Platform technologies
2nd Platform including mobile, social business,
cloud, and big data and analytics
1st Platform (BDA).

Source: IDC’s Worldwide Research 3

The Spending driven by New Technologies…
4 Pillars
&
Innovation Accelerators

5 Domains of Digital Transformation

© IDC, 2018 4
Digital Transformation (DX) is
Multifaceted and Accelerated
Leadership Omni-Experience Information Operating Model WorkSource
Transformation Transformation Transformation Transformation Transformation

➢ Digital Technologies to optimize internal operations

➢ Digital Technologies to interact with ecosystems
➢ Digital Technologies to create products, services, and experiences
➢ Digital Technologies to create new business models

Digital transformation is the approach by which enterprises drive changes in the

company’s business models and ecosystems by leveraging digital competencies.

Source: IDC’s Worldwide Research 5

© IDC, 2018
 IDC DX Framework
Digital Transformation
Leadership Omni-Experience Information Operating Model Worksource
Transformation Transformation Transformation Transformation Transformation

IT Strategy and Customer Experiences Enterprise/ Enterprise Vendor Sourcing and

Governance NextGen Security Infrastructure Management

Leading in 3D Device/Mobility Strategies Enterprise Applications AppDev and IT Talent and

App Provisioning Skills Management

Strategic Architecture Devices: PCs, Mobility, Information and Data DevOps Outsourcing Services
Wearables and Augmented Transformation
Reality/Virtual Reality
Services Transformation Social Business Big Data and Analytics Cloud Strategies IT Organizational
Development

Innovation Strategies eCommerce Cognitive Computing Transformative Tech: IoT, Technology Training
Robotics and 3D Print

Source: IDC’s Worldwide Research 6

© IDC, 2018
Accelerated Pathway - DX Model

Source: IDC’s Worldwide Research 7

© IDC, 2018
Indonesia’s Financial Services Industry –
Technology Spending
IDR 23 T
USD 1,727 M

IDR 12 T FSI
Banking
USD 960 M IDR 18 T
FSI
Banking USD 1,364 M

IDR 10 T
USD 760 M

✓ Hardware

2017 ✓ Software 2022

*FSI = Financial Services Industry
✓ IT Services Source: IDC’s IT Spending Guide
© IDC, 2018 8
Indonesia’s Financial Services Industry –
Technology Spending
✓ Hardware FSI 2017 (IDR T) 2017 (Share) CAGR 2022 (IDR T) 2022 (Share)
✓ Software Hardware 6.1 47 % 3.8 % 7.3 31 %
✓ IT Services Software 2 16 % 14 % 3.9 17 %
IT Services 4.8 37 % 20.1 % 12 52 %
Total 12.9 12.5% 23.2

Banking 2017 (IDR T) 2017 (Share) CAGR 2022 (IDR T) 2022 (Share)

Hardware 5 49 % 3.4 % 5.9 32 %

Software 1.4 14 % 14 % 2.7 15 %
IT Services 3.8 37 % 20.6 % 9.7 53 %
Total 10.2 12.4% 18.3

*FSI = Financial Services Industry

Source: IDC’s IT Spending Guide
© IDC, 2018 9
 Financial Services Digital Mission

1 in-line with Digital Lifesytle

of the Consumers
2 Convenient &
Comprehensive
for Organization Customers

Connected
Financial
Services

Transparent & Secure Efficient & Agile

to minimize Customer’s Risk in responding to Changes

3
connected to Third Party
Providers of Value

Source: IDC’s Financial Insights Research 10

© IDC, 2018
Example: Digital Vision, Strategy & Initiatives

Omni-Experience
Next-Generation Corporate Digital Trust & Efficiency &
Customer
Payments Banking Stewardship Agility
Engagement

Branch Transformation
• Digital marketing
• Mobile branch staff
Unified Payments Client Value and Data- Data-enhanced Identity Core Transformation
Infrastructure driven Pricing Management • Abstracting business logic
• Advanced corporate • Customer selection and • Retail customer onboarding • Open API
payments balance sheet optimization • Retail transaction
• Full customer payment • Strategic, data-driven pricing monitoring
visibility optimization

Digital Banking Mobile Payments Distributed and Direct Fraud Detection & Process Reengineering
• Chatbot service • P2P payments Connectivity Prevention • Automate mortgage
• Next-generation mobile • Mobile bill pay • API-based partner, supplier, • Fraud transaction origination
banking and customer ecosystems monitoring • RPA for operational support
• DLT-based trade finance • Regulatory compliance
networks reporting

Growing & Expanding Alternate Payment Rails Business Model Cyberthreat Detection & Right Sourcing
Relationships • Cross-border faster Innovation Prevention • Migrate app dev to cloud
• Contextual marketing settlement • Crowdlending • Transaction monitoring for • Create open environment for
• Retail customer onboarding • Least cost routing • Cash management as a bank staff business partners
service • Monitor staff
communications
Source: IDC’s Financial Insights Research 11
© IDC, 2018
IDC Financial Insights’ Technology Direction
2018-2020 within Indonesia Banking Industry

#6 - Corporate #4 - Lending as
Banking a Service
Analytics

#1 - Mobile
#5 - Payments
Intelligence

START
Automation
#2 - External
APIs
#7 -
CX/Channel
Experience
#3 - Connected
Core
#8 - Next-Gen
Security

Source: IDC’s Financial Insights Research 12

© IDC, 2018
 IT Spending by Line of Business for Indonesia 2017-2022*
Customer Experience

▪ Industry Specific Operations

Highest Higher
▪ Customer Service
IT Spending (software) growth rate (CAGR) than
▪ Sales
core system for the
▪ Marketing next 5 years
▪ Accounting/Finance/Billing
▪ Supply Chain Management
▪ Human Resources
▪ Security & Risk
▪ Engineering, Architecture & Research Marketing 15.1%
▪ IT
▪ Other Horzontal Operations IDR 465 billion Sales 14.3%
▪ Legal (USD 31 M) in 2017 Customer Service 14.1%

* Financial Services Sector

Source: IDC’s Worldwide Semiannual IT Spending Guide: Line of Business

© IDC, 2018 13
Source: IDC’s Financial Insights Research

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