Bank BRI: Creating financial opportunities in Asia with digital banking

Bank Rakyat Indonesia is making waves in Asia with its award-winning digital strategy. As a government-owned bank, Bank BRI is dedicated to changing the lives of its customers through accelerating financial inclusion across Indonesia. With an aggressive target of 84 percent of Indonesians participating in the banking system by 2022, Bank BRI is leapfrogging fintech competition thanks to its innovative digital strategy that has APIs at its core. By the end of 2019, Bank BRI expects to have reached a 70 percent financial inclusion rate among the country's population, in part due to the adoption of the Cloud Apigee API Management Platform as the bank's digital nucleus.

Transforming a legacy into a digital future

In the banking business, trust is essential, not only between the bank and its customers, but also between the bank and its partners. Recognizing that gaining and maintaining this trust would be key to customer and partner adoption of the new Bank BRI products and services, the bank decided to pursue ISO 27001 certification in 2018, becoming the first bank in ASEAN (the Association of Southeast Asian Nations) to become certified as information security compliant. Now the international community of partners and customers who use the bank's APIs have yet another reason to place their trust Bank BRI.

Kaspar Situmorang, Executive Vice President of Bank BRI, had the original vision for how the bank could transform itself into a fintech with digital technology and APIs. His team got started by implementing a web-native frontend over a new technology stack with Apigee as a second layer. This was a big change from the legacy technologies that existed when Situmorang joined the bank in 2017. Previously all of the bank's products had their own public APIs, which were very difficult to manage, secure, and monetize.

Since deploying Apigee, it's become much easier to manage the entire API lifecycle. Situmorang's digital bank team of 15 uses the Apigee monetization and developer portal features while managing and securing APIs and conducting big data integrations. Apigee has become Bank BRI's center of communications, handling all transactions between the bank and third parties.

Whereas previously it could take up to six months to onboard a new partner using host-to-host and VPN technology, now it takes less than an hour for partners to self-onboard using the Bank BRI Apigee developer portal. On the portal, partners can register, browse APIs, test in the sandbox, and go into production — all in less than an hour.

"Apigee has become the central nervous system for all communications between the digital core banking, the microservices, the frontend, and the apps. Apigee has become our sun. Everything rotates around Apigee," says Situmorang.

Increasing financial inclusions

With more than 10,000 offices across Indonesia, Bank BRI has the largest network of any bank in ASEAN. The bank is also the biggest microfinance lender in the region. Though already present in even the most far-flung corners of Indonesia, Bank BRI is still working on increasing financial inclusion among un-banked Indonesians. With 56 million people that haven't accessed banking services, Indonesia is in the bottom four countries for financial literacy in the world, along with Bangladesh, India, and China. It's estimated that there is up to $8.3 billion in currency being held outside the banking system.

In order to reach this mostly rural, subset of the population, the bank launched Agent BRILink, a nationwide network of branchless agents. These agents can open new accounts, take deposits, pay out withdrawals, and process and disburse loans in under two minutes with the Pinang microfinance mobile app. To date, over 30,000 customers have received loans through Pinang. Handling its own risk-scoring and automatic payroll deductions for payments has translated into less risky and more profitable loans for Bank BRI.

BRILink agents are bank customers who have been scored highly for reliability by the bank's big data analyses and who maintain a minimum balance of around $800. Combining this data with the Google Maps API, Bank BRI is able to score all 75.5 million of its customers and identify which of them should be recruited as agents for underbanked areas. Since 2018, the bank has been able to appoint more than 200,000 branchless agents using the Agent BRILink app, eliminating the need for logistically challenging face-to-face meetings. This has resulted in an increase in loan volume from branchless business from $15 billion in 2017 to $26 billion in 2018.

To enable branchless agents to sign up new customers and provide banking services, all they need is a mobile phone and internet service. With many parts of rural Indonesia not covered by commercial 3G, Bank BRI has overcome this hurdle by operating its own satellite. With the connectivity the satellite guarantees, branchless agents can help customers obtain microfinancing and open new shops and businesses in all parts of the country. The satellite also provides internet service across the APAC region wherever the bank operates, from Sri Lanka to New Zealand. While it might seem unusual for a bank to operate a satellite, it's reflective of Bank BRI's commitment to reaching its financial inclusion targets and meeting its customers wherever they are.

"Pinang was created to win against fintechs trying to compete against us on speed, cost, and security," says Situmorang. "The truth is that Indonesian regulators closed about 650 fintechs, mainly in the peer-to-peer lending space, because they were unsafe, too expensive, and very slow."

Using APIs to create and monetize new products

Another way that Bank BRI is leveraging Google Cloud solutions is through an innovative use of the Cloud Vision API, which enables the bank to integrate with the Indonesian government ID database. Identities of new customers — whether they're coming in via a branch, a BRI Link Agent, or a mobile app — are automatically verified in seconds through facial recognition. With instant credit scoring and identity fraud concerns essentially eliminated, the bank can make more confident lending decisions.

"Customers download the app and scan their ID, capturing their credit score in just a few seconds," explains Situmorang "The digital offer letter says how much they're approved for. They can then accept it, go to the approval screen, and do facial recognition. The money is disbursed immediately. Google Cloud has transformed us into a fintech."

Bank BRI sees a bright digital future, in part thanks to the API product marketplace it's creating to serve fintechs. With its digital technologies and massive customer base, the bank is sitting on a treasure trove of big data. Bank BRI already packages this data through more than 50 monetized open APIs for more than 70 ecosystem partners wanting to do credit scoring, business assessments, and risk management. Fintechs, insurance companies, and financial institutions don't have the talent or the financial resources to do quality credit scoring and fraud detection on their own, so they are turning to Bank BRI.

"Monetization is very important to us. It enables us to define our pricing based on API calls and bill automatically based on usage. We've already recognized $50 million through the Apigee monetization feature," says Situmorang.

Bank BRI is meeting and surpassing the goals it has set for itself for digitalization, increasing financial inclusion, and creating new revenue streams with APIs.