The pace of banking digitization is accelerating. This has been inseparable since the start of the pandemic, where digital transactions have increased in line with people’s preference for shopping online with a cashless system due to mobility restrictions. Quoting Bank Indonesia data in March 2021, there was an increase in the volume of digital banking transactions of up to 20.8% YOY (year on year). In addition, digital banking transactions also experienced a 19% increase to IDR 32,206 trillion in 2021.
Banking digitalization is carried out through services that make it easier for customers to carry out Peer-to-Peer (P2P), Consumer-to-Business (C2B), and Business-to-Consumer (B2C) transactions simultaneously and more easily. But behind the convenience, there are a number of challenges for the banking industry to digitize services. What are the challenges and impacts of digitalization transformation in the banking industry? In full, see the following article.
4 Challenges to Banking Digitalization
Banking Digitalization Challenges
The pandemic has changed people’s behavior and orientation, from previously a physical economy to a virtual economy. This condition gave rise to an acceleration and momentum of change in various aspects of people’s lives, including behavior in financial transactions.
The banking industry is forced to accelerate digital transformation and make extraordinary innovations and work effectively, efficiently and productively in order to meet customer expectations and needs.
OJK reminded the national banking community that there are a number of challenges that must be faced carefully and carefully so that the potential for banking digitalization can be utilized more optimally. OJK noted that there are at least four main challenges for the national banking industry to be able to develop business models in digitizing banking services. Here, among others.
1. API Attacks
API Attack is predicted to become the most frequent attack in 2022, API Attack is an attack in the form of abuse, API access violations, and bot attacks, one of which can threaten the safety of customer data in internet banking applications.
API Attack is an attack that will increase, because banks are currently using a lot of open banking in applications. Open banking allows banks to provide access to information and transactions to customers. If not paid close attention, important customer data can be the target of theft by hackers.
2. IT Infrastructure
Agile IT infrastructure will facilitate banking adaptation to new digital channels such as mobile apps, internet banking, e-commerce payments, and others.
3. Network Connectivity
Banks need to improve stable connectivity in order to provide a good transaction experience to all customers. Poor connectivity will affect customer satisfaction and business reputation.
4. Payment System Integration
Banking must be able to accelerate the end-to-end integration of the payment system industry ecosystem from digital banking, fintech, e-commerce, and consumers.
From a regulatory perspective, addressing the issue of payment system integration, Bank Indonesia launched a digital transformation of the payment system infrastructure so that it can be accessed through applications provided by the payment system industry.
BI-Fast implementation by banks to their customers will be carried out in stages in accordance with the bank’s plan to prepare payment channels for their respective customers.
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BI-Fast Trend Begins to Be Adopted by Banking in Indonesia
Bi-Fast Banking Digitization
Bi-Fast Banking DigitizationBI-Fast is a payment system infrastructure provided by Bank Indonesia that can be accessed through an application to facilitate retail payment transactions for the public and integrate the end-to-end payment system industry ecosystem.
Through this payment system, the central bank offers various advantages for banks, participants or customers. Starting from faster transaction completion times, higher security, to cheaper transaction rates. The BI-Fast system offers an interbank transfer rate of IDR 2,500 per transaction, which is cheaper than the BI National Clearing System (SKNBI) of IDR 6,500 per transaction.
With the various advantages offered, the central bank hopes that the implementation of BI-Fast can accelerate the digitization of the banking industry. This hope is also agreed by the national banking system.
The presence of BI-Fast is expected to accelerate the growth of digital banking transactions. The implementation of BI-Fast is targeted to increase the volume of cross-bank transfers. This is a positive impact of lower interbank transfer rates.
This is of course a breath of fresh air for the digitization of the banking industry. However, the implementation of BI-Fast is faced with the challenge of having a strong server infrastructure to support the payment system in real-time, safely, efficiently and available at any time. So, what are the solutions to the challenges of banking digitization?
The Helios Solution Series Responds to the Challenges of Indonesian Banking Digitalization
Solutions from Helios will help digitize banking efficiently and provide added value so that banks can improve services to customers effectively.
The acceleration of banking digitization is also aimed at increasing the efficiency of banking services and saving operational costs. In addition, to be able to reach more customers and increase competitiveness between the banking industry and across industries in the midst of unlimited competition.
The following is a series of digital infrastructure solutions from Helios to optimize digital services for digitizing the banking industry.
HPE servers
HPE has server technology that can support BI-Fast with high performance, improve user experience by reducing downtime, centralized services that can be accessed from anywhere in real time and support Bank Indonesia regulations.
Aruba SD-Branch
The slow connectivity has limited banking activities, resulting in customer dissatisfaction.
Banks need to improve stable connectivity in order to provide a good transaction experience to all customers. Poor connectivity will greatly affect customer satisfaction and business reputation.
Aruba SD-Branch is a solution for banking businesses to get stable network connectivity from head office to branch offices.
With the support of Aruba SD-Branch, banks can enhance their digital transaction experience more easily and effectively.
Cloudflare API Shield
Cloudflare API Shield is a solution to prevent API attacks by ensuring that the API is maintained and productive thanks to multiple layers of defense. There are several benefits of using your API security system using Cloudflare API Shield, as follows:
- API Discovery, discover and monitor your API endpoints.
- Layer 7 Security, preventing destructive attacks such as DDoS and forced attempts.
- Mutual TLS, provides authentication for mobile and IoT APIs.
- Positive API Security, protects API by applying the OpenAPI scheme automatically.
- API Abuse Protection, stopping API attacks with advanced anomaly detection.
- Sensitive Data Protection, avoid data leakage by continuously scanning important data.
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Helios as an IT Solutions Provider for the Banking Industry in Indonesia
It’s time to start digitizing the banking industry with HPE and Aruba SD-Branch server solutions from Helios to improve the best performance for BI-Fast servers so that network connectivity is stable.
Get both solutions at Helios Informatika Nusantara (HIN). Helios as an authorized partner of Hewlett Packard Enterprise (HPE) and Aruba SD-Branch in Indonesia will assist companies starting from the consulting, deployment, to after sales support.
Helios certified and professional IT team will also help you avoid trial and error. Find out more about the application of technology in the banking industry by contacting us via i[email protected].
Penulis: Ary Adianto
Content Writer CTI Group
