Indonesia's banks need to face facts: Indonesians are becoming wealthier and more tech-savvy. The average customer, these days, expects intuitive, digital services.
Consider the macro-setting: consumption accounts for nearly two-thirds of Indonesia's fast-growing economy. What are people spending their money on? Mobile phones are high on the list. According to Redwing-Asia, Indonesia is ranked fourth globally for mobile phone users at 278 million - a number larger than its population, because some tend to have more than one mobile.
By 2016, it is forecasted that smartphone sales will double to 34 percent of market sales as prices decrease. Furthermore, given that mobile devices are becoming more sophisticated (with more value-added services and thanks to wifi and 3G), customers are increasingly using their mobile phones instead of PCs for Internet access.
Throw into the mix that Indonesia has a young population - the average age is 28 - which of course is the very demographic most likely to expect digital offerings. That means, in Indonesia, there is a significant and growing potential market for mobile financial services. Indeed, by 2016, we forecast that mobile subscribers could increase to 96 percent and that the potential penetration increase for mobile financial services users is between 37 million and 67 million customers.
Today vs Tomorrow
Right now, banks typically offer informational and some transactional mobile banking service. So you can make a balance enquiry or you may get mobile alerts. Some customers may have access to mobile banking remittances services, bill payments, top-ups and rewards. Some can even transfer and make payments. But there could be so much more and the offerings could be so much better.
Let's start with the more. You should be able to apply for a credit card and a loan with your phone. You should be able to handle foreign exchange transactions, purchase insurance and oversee wealth management products through your phone.
Retail customers could be making far more mobile payments and point-of-sales transactions if banks and retail outlets set up such processes. If you can buy your coffee with your phone in Hong Kong or Singapore, why can't you do that in Jakarta? And you should be able to purchase a T-shirt or even a washing machine in the same manner.
And now for the better. When all of these services are available from Sabang to Merauke, they should be so much simpler to use than what is already on offer. Customers don't want to go through eight or 10 clicks just to make a payment. It should be straightforward, no more than three clicks, which means banks can't simply minimise the size of the PC Internet screen offering onto a phone. Mobile services are different. They need to be bespoke and intuitive.