JAKARTA, AUGUST 15, 2024 – In a significant development for Indonesia’s financial sector, AC Ventures, in collaboration with Boston Consulting Group (BCG) and its tech arm BCG X, along with the Indonesian Chamber of Commerce and Industry (Kadin Indonesia), unveiled a groundbreaking report titled “Harnessing the Power of (Gen)AI in Indonesian Financial Services.”
The report, based on a survey of 41 financial institution leaders and interviews with five fintech startups, offers deep insights into the adoption and impact of Artificial Intelligence (AI) and Generative AI (GenAI) across Indonesia’s financial services industry. It also provides strategic recommendations for business leaders on implementing AI technologies, while offering guidance to the Indonesian government as it transitions to a new administration and explores the potential of sovereign AI development.
Central to the report is a strategic framework called “Deploy, Reshape, Invent,” designed to help Indonesian financial institutions effectively integrate GenAI into their operations. The framework prioritizes the deployment of GenAI for everyday tasks, with 51% of respondents focusing on this area, while 27% see significant potential in inventing new products and services powered by GenAI.
Globally, GenAI is recognized as a disruptive technology, with 85% of financial institutions acknowledging its impact, but only 18% having a clear strategy for in-house implementation. In Indonesia, 61% of financial institutions express confidence in their technological infrastructure for GenAI integration, with nearly half already leveraging the technology to enhance customer service.
However, the report highlights that despite the enthusiasm, many Indonesian financial institutions are still in the early stages of GenAI implementation. While 41% are piloting GenAI use, scaling these efforts to deliver substantial business value remains a challenge, with only 37% of respondents confident in their talent readiness. Upskilling employees to interact with AI tools is among the lowest priorities cited by these institutions.
Andy Lees, Managing Director and Partner at BCG X, emphasized the transformative potential of GenAI in Indonesia’s financial sector. “GenAI can broaden financial access, improve customer experiences, and facilitate the rapid scaling of services. However, many initiatives are still tech-led pilots that have yet to deliver real business value at scale,” said Lees. He advocated for a strategic framework that integrates technical implementation with governance, operations, and talent development.
The report also calls on business leaders to adopt a holistic approach to GenAI integration, focusing on governance, technology, people, and processes to navigate and lead in the AI era. Pandu Sjahrir, Founding Partner at AC Ventures and Department Head of Economic and Financial Technology at Kadin Indonesia, highlighted the importance of sovereign AI development and public-private partnerships in driving Indonesia’s AI ambitions.
The report’s insights are expected to inform the upcoming White Paper on Economic Development and Policy Directions for 2024-2029, being prepared by Kadin Indonesia, and serve as a strategic guide for both the private and public sectors in harnessing the full potential of GenAI.