Three major state-owned banks of Mandiri, BRI and BTN will use their 2023 Capital Expenditure (Capex) to support the strengthening of cybersecurity, digital architecture, IT and digital services.
As part of the government’s bank restructuring program in 1998, four state-owned banks of Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Exim and Bapindo merged to become PT Bank Mandiri Tbk (BMRI). The country’s largest bank recorded total assets of IDR 1.58 quadrillion in March 2021.
The country’s oldest bank PT Bank Rakyat Indonesia Tbk (BBRI) was established in 1895. It specializes in small scale and microfinancing to its approximately 30 million retail clients through its over 4,000 branches, units and rural service posts.
PT Bank Tabungan Negara Tbk (BBTN) was founded in 1897 by the Dutch East Indies government as a post office savings bank. Its products include banks accounts, loans and Sharia-compliant banking services.
Capex allocations
As more consumers use digital transactions, cybersecurity has become the main concerns for banking industry players. Therefore, they have allocated a large amount of funds to strengthen the security.
Mandiri has allocated over IDR 2.5 trillion (US$ 167 million) for IT capital expenditure (Capex) in 2023. This amount is an increase from the 2022 IT Capex allocation of IDR 2.2 trillion. Meanwhile, BRI prepares 10% higher Capex in 2023, compared to 2022 which reached IDR 4.5 trillion. Whereas BTN set IDR 500 billion Capex for 2023, compared to the previous year of IDR 400 billion.
Mandiri improves RASS
Mandiri IT Director Timothy Utama said the company would continue to improve the RASS (Reliability, Availability, Security & Scalability) system capabilities, including by increasing IT capacity to fit for growth with business needs and modernizing network and end-to-end security technology. He added that the Capex could increase, depending on the expectations of the dynamic need in technology development in 2023.
“We will also continue to be aggressive in continuing technology and digital initiatives. Of course, we will focus on Livin’, Kopra, smart branches and also strengthen our business processes and operational banking,” Utama told Kontan.co.id on January 28, 2023.
Mandiri’s digital transaction growth is currently experiencing a significant surge. The increase in transactions through the Livin’ digital channel reached over 60% in 2022. The number of digital channel users has also risen almost two-fold and the bank expects future growth.
“We have been anticipating this surge for several years and we have made various efforts to prepare a high transaction processing capacity. This year, we can serve up to 30,000 transactions per second and we will prepare our system to be able to double that to anticipate an increase in transactions in 2024,” Utama explained.
From the corporate customer segment, the Wholesale Digital Super Platform Kopra has launched Online Onboarding, Online Subsidiaries and Custody features. By now, Mandiri has implemented 241 smart branches in all of Indonesia.
BRI develops BRILiaN
BRI Director of Digital & Information Technology Arga M. Nugraha explained that the bank’s system, application and network capabilities were very strong in facing cyber attacks from outside. Digital literacy gap has prompted the bank to raise the consumers’ awareness and intensify consumers’ education on this issue.
BRI develops BRILiaN, which serves as digital educators, to spread not only the use of digital transaction tools but also the risks that come with them.
Nugraha said the budget would be used wisely and balanced to serve a large number of consumers as digital and IT would remain the backbone of BRI in accommodating business growth in 2023.
BRI will ensure that the BRImo IT system is ready to support rapid transaction growth. The transaction volume in 2022 has surpassed IDR 2,000 trillion. The Super App has already served 3,000 transactions per second.
“Of course, we will always prepare BRImo’s capacity. Our back-end system, for example, can handle up to 7,500 transactions per second. This will also be supported by strengthening our digital architecture on the side of the surrounding systems and we will ensure this is to maintain the reliability of our digital services,” said Nugraha.
BTN adds capacity
BTN Director of Operations, Information Technology and Digital Andi Nirwoto said the Capex would be used not only for digital and security solutions but for adding capacity, refreshing infrastructure capacity and some data management-related initiatives. Last year, the company absorbed 95% of the allocated IDR 400 billion Capex.
“In facing an increase in digitization transactions, we have to monitor 24×7 to anticipate infrastructure capacity and security strengthening as well as aspects of people behind applications/HW. There must be continuous additions to features and innovations,” he said.
Risks in digital banking and cybersecurity
Indonesia is still facing rampant cyber-attacks and data breaches, particularly in banking industry. Some of the factors include lack of awareness and knowledge about cybersecurity among individuals and organizations, insufficient investment in cybersecurity infrastructure and solutions and the rapidly growing number of internet and smartphone users.
The country’s banking and financial sector, which is heavily reliant on digital technologies, is particularly susceptible to cyber threats and attacks. The government has taken steps to improve the country’s cybersecurity posture, including enacting regulations and policies to promote secure information management, establishing a national cybersecurity agency and promoting public-private partnerships to enhance cybersecurity awareness and education.
Digital and cybersecurity risks in banking include the potential for unauthorized access to sensitive information, theft of funds through hacking or fraud, data breaches and other forms of cyber attacks that can impact the confidentiality, integrity and availability of financial transactions. These risks can result in reputation harm, financial losses and regulatory penalties.
