Telecommunication enables digital financial solution

Development in information and communications technology in line with the supporting

infrastructure globally has changed peoples way of life and activities in many aspects, such as
dealing with financial affairs.

A guy was on a motorbike; desperately racing through congested traffic to reach an ATM. He
then called his sister asking for help to purchase a rare music collection. With just a few clicks
on her phone, his sister who was working on a remote mountainous area made the payment.
The problem was solved.

Just use mobile banking, she advised her brother.

Yes, its a television commercial depicting how mobile banking becomes a more important thing
in the modern daily life of humans. With mobile banking, or m-banking, people can access their
financial records anytime, anywhere. Even if they are away from any branch, ATMs and desktop
computers, people can easily check the balance account, make fund transfers and view their
transaction history, with safety and security guaranteed by the related banks.

Beyond a communications device, a mobile phone now functions as a camera, clock and
calendar, calculator, alarm, games, diary, music and video player. For sure, users can also now
utilize the gadget for their banking, too.

Mobile banking or m-banking is apparently another form of Internet banking, also known as
online banking or e-banking. The latter is a way for customers of a bank to conduct financial
transactions on a secure website operated by the related financial institution.

Online banking and m-banking are blooming in many countries, also in Indonesia, a nation with
some 250 million people. Though only 20 percent of Indonesias total adult population has an
account at a formal financial institution, as indicated by the World Banks 2011 Global Financial
Inclusion Index, both digital facilities are on the rise to serve existing and prospective users in
big cities, thanks to better cooperation between banks and telecommunications carriers in the
country.

More banks are expecting to roll out e-banking and m-banking solutions, paralleling the
measures set by telecommunications providers to upgrade their networks to deliver faster data
speeds. In some cases, several banking institutions in Indonesia now provide
telecommunications services, while several cellular operators offer their own financial-service
applications.

Yet, its expected that banks and telecommunications providers can bolster their collaboration or
converge their services in offering electronic financial solutions. The two industries began
cooperating long ago, as banks traditionally lease some kind of networks from
telecommunications carriers to provide facilities such as ATMs and Electronic data Capture
(EDCs).

The growing number of Internet and mobile phone users in Indonesia has been a key driver for
cellular network operators in improving their digital financial solutions.

Data from the Association of Indonesian Internet Providers (APJII) indicates the number of
Indonesian Internet users reached 71.19 million in 2013, up by about 13 percent from 63 million
users in 2012, with a current penetration of 28 percent of the total population of around 248
million people. This year, the figure is expected to reach 107 million in 2014 and increase to 139
million in 2015.

Mobile phone subscriptions, in the meantime, have surged 2.5 percent year-on-year to 285
million subscriptions in 2013, with the number of 3G services subscriptions hitting 45.4 million,
according to data from Accenture.

On the other hand, the fact that many Indonesians are still non-bankable has not deterred
telecommunications providers and banks from extending new innovative features in online or
digital financial solutions.

State-owned Bank Tabungan Negara (BTN), for instance, aims to make people more familiar
with Internet banking. Total e-banking transactions at the bank have increased by an average of
41.5 percent every year. Additionally, e-banking transactions now account for 74.2 percent of all
transactions at BTN. The bank predicts that e-banking transactions will grow by 50 percent this
year, given the fact that e-banking is showing positive growth in the country and will continue to
do so in the future.

Another state-owned bank BRI has also seen rising electronic transactions. The bank reported
that e-banking transactions reached 409.8 million in the first quarter this year, more than triple of
128.8 million transactions made at the tellers. Its also reported that Internet banking users at
BRI also rose significantly to 1.38 million in the first quarter 2014 from 430,000 in the
corresponding period last year.

As consumers tend to go more on mobile devices, telecommunications carriers, particularly
cellular providers, have also introduced latest electronic financial solutions to pamper their
customers. Major cellular players have introduced the so-called mobile payment services; such
as Telkomsel with its T-Cash, Indosat with Dompetku and XL Axiata with XL Tunai.

In the future, more Indonesians will be able to access to their bank accounts through the
computers and mobile phones. Banks, telecommunications companies and also application
developers are expected to prepare better infrastructure, systems and security/protection
software, so Indonesia will somehow be more invulnerable from to cyber crime attacks. (I.
Christianto)

References:
http://acworth.patch.com/groups/business-updates/p/the-jakarta-post-axis-capital-group-pt-
telecom-indonesia
http://www.coroflot.com/hilaria/The-Jakarta-Post-Axis-Capital-Group-PT-Telecom-Indonesia