State-owned PT Bank Mandiri Tbk plans to develop digital services to strengthen bank digitalization. Mandiri took half of the total capital expenditure (Capex) worth IDR2 trillion on July 28, 2022.
Established in 1998, Mandiri is one of the largest banks in Indonesia in terms of assets, loans and deposits. Following the 1998 economic crisis, the government decided to conduct a banking restructuring program and merged four government banks into Bank Mandiri today. By 2020, Mandiri had 2,511 branches nationwide and seven overseas branches with 5 principal subsidiaries of Mandiri Sekuritas, Mandiri Tunas Finance, AXA Mandiri Financial Services, Bank Mandiri Taspen and Mandiri AXA General Insurance.
Digitalization as a priority
Mandiri is focusing on its commitment on digitalization process in 2022. The company has allocated funds for the investment, update and continuation of its core bank. The purpose of this investment is to develop the smart branch infrastructure of the bank.
In Q2 2022, the company had an increase through its digitalization features especially in Livin’ and Kopra. The positive trend continues to bring large wholesale transactions effectively to the company. Mandiri has taken a portion of the Capex in 2022 at IDR2 trillion for the investment in Information & Technology.
Livin is Mandiri’s mobile banking application while, Kopra is a single-access digital service by Mandiri, which is a center of financial transactions in the segment of wholesale and value chain end-to-end.
Mandiri Director of Information and Technology, Timothy Utama, said the IT Capex took 50% of the bank’s total Capex of IDR2 trillion in 2022.
Utama explained he believed the digitalization initiated by Mandiri has proven its contribution to the significance of the company, especially in fee base income (FBI). The increase in FBI especially in Livin’ is 17% YoY and Kopra at 13% YoY. As for the number of users, it increased 137% or 23,000 users by the end of 2021 and 55,000 by June 2022. In 2021, the transactions hit IDR1,080 trillion and in 2022, they hit IDR8,053 trillion.
Challenges of Digitalization and Cybersecurity
In 2021, Mandiri increased its cybersecurity measures to counter cyber attacks in the digital era after Financial Services Authority (OJK) released blueprints for digital banking transformation. The company will actively increase its layered security system to avoid digital crime or cyber-attacks.
Mandiri Corporate Secretary Rudi As Aturridha said in an interview in October 2021: “One of the important things to be underlined is the importance of bank risk management in facing cyber attacks in the digital era.”
However, a survey by Cybersecurity Research Institute (CISSReC) said Mandiri had a security score of just 54 from 100 points. Furthermore, the National Cyber and Encryption Agency (BSSN) said there were 88 million cyber attacks over the course of the first half of 2020.
