In this exclusive interview, we engage in a thought-provoking conversation with Armand Hartono, Deputy President Director of Bank Central Asia (BCA), exploring BCA's remarkable journey, innovative strategies, and forward-thinking approach to navigate the dynamic landscape of the banking industry in the APAC region. BCA was named APAC Innovator of the Year at the Qorus Reinvention Awards APAC 2023.
Armand, for the benefit of our readers who may not be familiar with the banking industry in the APAC region, how would you introduce BCA to them?
Bank Central Asia, or BCA, is one of Indonesia's largest retail consumer banks. Despite the name, we're not a central bank, but rather a key player in the financial landscape. Our activities span consumer payments, corporate loans, and a wide range of products including investment security, insurance, Sharia banking and digital banking. Notably, we have the largest market capitalization in the region, owing to our consistently low cost of funds and proven risk-adjusted profitability over the last two decades. Even during challenging times like the Covid-19 pandemic, we've managed to grow our customer base, assets and loan book.
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Given your role as the head of retail banking at BCA, what are your goals for the next few years?
In my capacity as the head of retail banking, I oversee various aspects, including SME and business loans, branches, contact centers and digital services. Our primary goal at BCA is to ensure survival in any situation. This involves a relentless focus on efficiency and productivity, encapsulated in our model: better, cheaper, faster, safer. We aim to provide top-notch services to our clients while making continuous improvements to stay resilient, especially during challenging times.
Speaking of innovation, could you share an example of automation or technological advancement at BCA that you are particularly proud of?
Absolutely. In 1997, we faced the challenge of growing our branches from 80 to 500 within seven years. While technology helped, we still needed to add a significant number of people to manage the expansion. Learning from that experience, we shifted our focus to efficiency. Today, with 1300 branches, 36 million accounts, and almost the same number of team members as in 1997, we process over 140 million transactions daily. Our commitment to continuous investment in people, process, and technology has been instrumental in this transformation.
Many banks now liken themselves to tech companies. Does BCA consider itself a tech company, and how do you embrace technological advancements?
We don't see ourselves as a tech company per se, but more as avid tech users. While we internally innovate using available technologies, our primary goal is to make banking better for our customers. For instance, we've generative AI to streamline processes and enhance customer service, proving to be a game-changer in our operations. New technology such as generative AI will open new possibilities to further improve customer experience. New technology such as generative AI will open new possibilities to further improve customer experience.
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BCA has been actively working on financial inclusion, particularly for the underbanked. Could you shed light on your strategies and goals in this regard?
Our approach involves differentiating between the unbanked and underbanked. While challenges persist in serving remote areas lacking telecom infrastructure, we focus on the underbanked with good trade volumes and connectivity. We've successfully increased our accounts through innovative online account opening methods, and our goal is to extend financial services to these populations while promoting economic development through programs like ecotourism villages and small business initiatives.
With the rise of new technologies, especially AI, what is BCA's stance on adopting these technologies, and do you have any success stories?
We've been at the forefront of adopting AI and machine learning. Generative AI, in particular, has been a recent highlight, allowing us to automate processes and enhance customer service. From using AI to improve chat functionality in our mobile app to employing it in our cash management operations, we've experienced significant success, making our operations more efficient and cost-effective.
Shifting gears, could you elaborate on the culture and workforce transformation at BCA, especially how you foster an innovative mindset among your employees?
Our journey involves evolving from a hierarchical structure to a network organization that encourages open communication and innovation, allowing ideas to flow freely across all levels. Innovation is not confined to a central team; instead, we encourage a culture where anyone can contribute to improvements. This cultural shift has been crucial in making us more innovative and adaptive.
Lastly, considering the growing focus on environmental, social and governance (ESG) factors, how does BCA approach sustainability and combat climate change?
At BCA, we've been incorporating ESG principles into our operations for decades. Our approach is aligned with our core values of making things better, cheaper, faster, and safer. From reducing paper usage to minimizing energy consumption, we've integrated sustainability into our everyday practices. We recycle plastic cards, plastics from POS EDC Machines, reduce electricity usage. We communicate this to our customers transparently, emphasizing that these efforts are not new but an intrinsic part of our commitment to doing the right thing.
Given the unpredictable nature of the world, especially in the current global climate, how do you see BCA shaping up in the next two years?
The future is volatile, and nobody can predict it accurately. Our strategy revolves around preparation and ensuring the best possible services, financial stability, and readiness for any scenario. Our focus remains on survival and being well-prepared for the uncertainties that lie ahead. It's a realistic approach, considering the ever-changing landscape.
Indeed, a pragmatic outlook in these uncertain times. Armand, thank you for sharing your insights and experiences with us today.
My pleasure. Always stay prepared and focused on providing the best for our customers.
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