Interview: Batara Sianturi
How could innovations in payment solutions facilitate the growth of e-commerce?
BATARA SIANTURI: When we consider ways to increase cashless transactions in the e-commerce market, we see the importance of electronic payments, which currently can only occur through credit cards, debit cards and e-wallets. Credit cards continue to be one of the most popular means of payment in e-commerce, and they typically have lower cancellation rates than other payment methods. If we continue to enhance the security of card transactions, this will complement the convenience of more advanced credit cards. There has been a lot of emphasis on chip cards to further enhance the security of these transactions, and technological advancements will bring further evolution of this.
In addition, the concept of e-wallets will develop further, but Indonesia is still in the initial stages in terms of closed-loop, proprietary wallets. Using e-wallets is also a way of decreasing risk, because instead of exposing your entire account history, you simply load the wallet.
However, we cannot talk about the growth of e-commerce without addressing the increasing usage rates of mobile phones – especially smartphones. Internet access and mobile phones will be the main drivers of growth in e-commerce. In terms of digitisation, providing mobile access will be very important.
Nevertheless, we also need to understand that digitisation means different things to different banks. There is no right or wrong strategy in going digital. You will see that different banks will emphasise different focal points in their digital strategy.
For example, a bank with a vast branch network may opt for digitised processes, while a bank with millions of credit card customers may choose to provide e-statements; banks with a well-developed phone banking infrastructure would probably launch voice recognition services. The future of digital banking lies in tailoring services to customers’ needs and banks’ current resources, both for retail and for corporate banking.
What role do you see global banks playing in attracting more investment to the country?
SIANTURI: Global banks have platforms, presence and networks all over the world. Through them we can connect with multinationals interested in investing in Indonesia. When multinationals want to invest here, they usually already have a banking relationship in their home country, and this facilitates their outbound investment. We can also support Indonesian investments abroad, as we will see more and more Indonesian corporations either regionalise or globalise. For example, some e-commerce players may want to expand to Singapore or Malaysia, and since global banks have an extensive network, they can facilitate that expansion.
Foreign investment flows are constantly evolving. Whether it is through a bilateral relationship, for example with China or the US, Indonesia continues to be a very attractive market for portfolio investment. This is a role we can uniquely play, as we connect the client side and the investor side of capital market solutions, like bonds or equities. We believe that the outlook for investment in Indonesia will remain positive. Our success with global bonds in the past two years demonstrates a healthy appetite for investment in Indonesia.
What segments do you expect to supplement growth in the second half of 2017?
SIANTURI: We are seeing stronger commodity prices, and we feel that they will continue to increase. There are also public infrastructure projects, which will continue to gain momentum. Furthermore, the funding needs of the public and private sectors, especially in terms of operating expenses and capital expenditure, will continue to expand. Interest rate-sensitive sectors should benefit from Standard & Poor’s upgrade of our sovereign ratings to investment grade, as well as our very high rate of consumer confidence. With these factors in mind, we expect consumer finance, construction, property and retail to do well in the second half of 2017.
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