Software AG > Case Studies > Digital Transformation of Microfinance: A Case Study of Bank Rakyat Indonesia

Digital Transformation of Microfinance: A Case Study of Bank Rakyat Indonesia

Technology Category

Application Infrastructure & Middleware - Middleware, SDKs & Libraries
Platform as a Service (PaaS) - Application Development Platforms

Applicable Industries

Buildings
Finance & Insurance

Use Cases

Building Automation & Control
Machine to Machine Payments

Services

System Integration

About The Customer

State-owned Bank Rakyat Indonesia (BRI) is the largest national bank in Indonesia and the world's largest microfinance institution. Founded in 1895, BRI focuses on providing financial services for small businesses and individuals across Indonesia. The bank operates 9,000 physical branches and a network of over 500,000 hyperlocal 'branchless' agents, serving over 100 million customers. BRI's main focus is offering microfinance loans to some of the smallest businesses in Indonesia, including farmers, fishermen, and newly established micro-segment entrepreneurs. The bank aims to become the most valuable banking group in South East Asia and Champion of Financial Inclusion by 2025.

The Challenge

Bank Rakyat Indonesia (BRI), the largest national bank in Indonesia and the world's largest microfinance institution, faced several challenges in its quest to digitalize transactions and meet rapidly changing customer needs. The bank's complex architecture, which included over 200 different systems and multiple middleware platforms, made it difficult to integrate, operate, and monitor new applications. This complexity also hindered the bank's ability to quickly bring new services to market. Furthermore, BRI needed to reduce costs on smaller, shorter-term loans, a key component of its microfinance offerings. The bank's existing technology had limited capabilities and performance, and could not support its new digital banking initiative.

The Solution

BRI embarked on a digital transformation journey, aiming to streamline its existing technology and move to a single integration platform that supports omni-channel integration and microservices architecture. The bank partnered with Software AG, whose webMethods solution won out over competitors due to its performance and speed. webMethods was able to meet 100% of BRI's requirements in a proof of concept built in just two weeks, and demonstrated the ability to handle a much higher transaction volume than BRI's expectations. BRI implemented webMethods Integration in 2019, with plans to move to microservices and DevOps, and add new services for customers. The new middleware system aims to support massive annual transaction growth, from 45 million in 2020 to 3 billion in 2021.

Operational Impact

The implementation of webMethods has simplified BRI's IT architecture, resulting in highly resilient applications with minimal downtime and robust transaction orchestration integrating multiple back-end systems. This has enabled faster time-to-market for new services and APIs. BRI can now provide omni-channel capabilities and rich features for its mobile banking customers and its remote hyperlocal agent network, offering faster services and better coverage throughout Indonesia. The bank's customer base and transaction volume are growing, putting it on track to achieve its ambitious growth goals.

Quantitative Benefit

Reduced loan processing time from two weeks to two days, with a prototype to reduce that to five minutes.
Handled a much higher transaction volume than BRI’s expectations – and double that of competitors (1.500 transactions per second versus less than 750).
Projected annual transaction growth from 45 million in 2020 to 3 billion in 2021, an increase of 66 times.