Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Embodying Bank Market: A New Business Model towards
Total Financial Inclusion
Rindawati Maulina and Wawan Dhewanto
The low level of populace bank-ability in Indonesia is one issue at
micro-level, yet to become a main concern for the macro-level
pertaining to the power of higher and sustainable economic growth
achievement, especially for a developing country. Bank Indonesia
(BI) who acts as macro stabilisator has a vital role to increase
communities’ involvement in banking services. This role is aiming
to encourage the community to heighten their saving through
various banking products. In addition, people who are interested in
entrepreneurship are also motivated to obtain banking financing so
that the intermediary function of the Banks could run more
effectively. Furthermore, it is believed that the greater transaction
by people via banking ,the more effective the policy monetary
conducted by BI achieves its goal.
One simple initiative which can be accomplished by BI is to
facilitate an integrated system as a place for the community and
the Banks to meet and perform transactions. In this paper BI is
recommended to build a Bank Market by adopting the basic
concept of market. The Bank Market will be equipped by webbased information system and be supported by the latest
communication technology. Toward total financial inclusion, Bank
Indonesia may serve as the Secretary of the Bank Market with
several authorities namely to develop the system, monitor the
system, and maintain the system. Within the Bank Market, all
interests of the actors in Banking Business are accommodated
adequately. On the other hand, ample benefits can be derived from
the establishment of Bank Market at present time as well as in the
future. The market is built by the newer business model which
contains of several new factors to enhance feasibility, user-friendly
and goals accuracy of financial inclusion itself.
Keywords: Bankability, Bank Indonesia, Financial Inclusion, Entrepreneurship, Bank
Market, Business Model
Financial Inclusion: Issue and Prospect
Indonesia, hitherto, has to grapple with the issue on low level of populace bankability. It
indicates poor banking involvement both ways, obtaining deposit and delivering financing.
Compare to other countries in South East Asia like Malaysia and Singapore, only 37,2% out of
250 million Indonesians people owns the bank account, with Jakarta and Surabaya are the
highest by 48,0% and 30,8% respectively. Moreover, people who use credit card for financing
purpose only registered by 2,8% (MARS survey, 2011). On the other hand, Malaysia and
Singapore recorded almost 60% and 100% bankable populace respectively1. Heed this matters,
Rindawati Maulina, Economist Bank Indonesia and Wawan Dhewanto, School of Business and Management-ITB
1.Cited from Ansor Chief, Nusron Wahid on Syariah Micro Financial Service Exhibition in celebrating GP Ansor anniversary in
Kompleks Stadion Manahan, Solo July 14th 2012 .
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Indonesia might entail a huge and extreme leaping strategy to catch up the percentage. Several
notions to widen banking attendance have been hindered by its geographical as an archipelago
country. As a result, it has led to dropping remote area from banking services reach. Many
Banks believe the new branches establishment in remote area is a disadvantage for their
business continuity, regarding the generating remarkable cost oppose to the gained deposits to
counterbalance the overall operational cost.
Despite the impediment of banking area expansion, the intermediation role by Banks in
obtaining deposits and financing the populace is salient for the economy. As explained by many
economists and experts, the successfully growth of a nation is also tightly related to the growing
numbers of entrepreneurs. According to Sutrisno and Didik in their books, the achievement of
the nation has been gauged by the role of a rise cohort in entrepreneurship (Sutrisno, 2002).
Japan‟s Meiji Restoration era is one to be mentioned as an example of the prominent
entrepreneur roles during the time. In addition, David Mc Clelland in his book, The Achieving
Society (1961), had suggested entrepreneurship has a way of thinking of “need for achieving” to
determine individual‟s achievement. Similarly, it has also contributed to a nation development.
Number of people with the entrepreneurship mentality will support as a gap filler to satisfy the
connectivity between the opportunity and reality ahead. The role is crucial for most of
developing country such as Indonesia who has affluent resources, yet unmanaged properly
given the qualified human resources. Complexity in gaining business capital, as well as
repaying the debt remain a foremost hinder for growing entrepreneurship in many developing
countries as the rate issuing by the Bank is still high following the hike of inflation and vulnerable
credit risk. Hence, access establishment by Banks and revisit banking business model to collect
deposits and dispense the fund are regarded to be the enticing issue to get further exploration
these days. Nonetheless, there is not only a few of profound research had been conducted
regarding banking market characteristics and people‟s behavior in banking service in Indonesia
but there is also lack of related research on macro and micro relationship to support earlier
research.
As a matter of fact, banking is one of the most technology basis equipped business in the
economy. It is intensively applying modern information system as well as communication
system to espouse their business. By this reason, the technology booming nowadays should be
expected as a worthy cure for Indonesia geographical specter. It will create a more solid and
efficient bound cross-region in the country indeed. Hereinafter, by developing the existing
technology into the more integrative system, people‟s involvement in banking is expected to
grow higher and rapid.
Regarding the utilization of the information and communication technology, Bank Indonesia as
one of the parties who concerns with the issue of financial inclusion proposed the application of
the Branchless Banking concept in July 2012 (Bankable Frontier Associates, 2012). However,
the Bank meets several difficulties to implement the concept since there is a regulation of the
“Know Your Customer” or KYC in abbreviation, which bank should obey before the account
opening or other transaction process endorsed. It has also been doubtful by most of bank
leaders to encourage financial program due to several regulations and licensing matter that
prohibit the bank to conduct some transactions outside the office or branches such as account
opening, deposit collecting, fund transferring, etc. Thus, they hope Government can do some
regulations relaxation concerning the existence of the expected bank agent to implement the
Branchless Banking concept as well as to loosen the KYC principles.
Other obstacles namely asymmetric information and weak cognition about banking services and
banking products among people remain a major concern for Bank Indonesia to encourage
higher financial inclusion. People who live in the village area or without banking reach tend to
keep their money in their house instead of the bank and also prefer to take a shortcut loan from
their family or others in the neighborhood or from the money lenders. Reasons such as
administration requirement and technology inept prevent people to come over the bank. Cultural
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
and social factors also plausibly obstruct people‟s interest to get served by the bank2. Further,
the present banking business still indicates a one way process where the initiation of transaction
begins by the applicant, not the bank. Meanwhile, lack of brief information and viable invitation
would not easily bring people to the bank.
From the bank side, in order to provide banks with a complete debtor profile before approving a
financing and for a high assurance reasons, since 2008 Bank Indonesia as the regulator
authority has established the system called Debtor Information System (SID). Based on the
regulation applied in the system, all banks under Bank Indonesia supervision have to report the
banks‟s debtor information online to the system. Nonetheless, many of irrelevancy cases in
financing by banking services remain to exist. Consequently, many banks do not easily approve
the applicant to get fund due to the high credit risk perception amidst the rise of uncertainty in
economy (Juhro (2009), Arefianto(2010)). Moreover, the business sustainability becomes
endangered in a long run without the innovation to invent a system that might serve coincidently
as a market for the banks to promote their services integrated to the promising applicants.
A good business model is definitely required in banking to create a long lived and sustainable
business. Furthermore, the information and technology system has been developed over the
time and certainly become one of the key activities to support the business model in banking
(Figure 1). However, the system and banking model has been established and used by banks
separately. Each bank is rolling their own business model in order to overcome competitors.
This presents an exclusive impression for banking in Indonesia and heightened people‟s
hesitation. More ironically, despite the backbone role of information and technology system,
most of banks pick physical development like establishing more branches as the major priority
for their business enlargement. It will necessarily prevent a profitable climate of domestic
banking industry. In Figure 1, we can find the existing model of banking in general. Banks do
personal assistance oftentimes to a narrow customer segments known as their own depositors
and borrowers. Unfortunately, it has not yet accommodated the presence of expert and
competitors‟ opinion. In Cost Structure section, banks are likely to include interest expenditure
and channeling as the identified costs. In fact, possibly there is an opportunity cost to include as
the consequence of unidentified losses since many of community member have a limited
participation in banking services.
Key Partners
Key Activities
Investments
partners
Branch Operations
Technology
vendors
Call center
operations
IT Operations
Regulatory
Agencies
Value Propositions
Deposit Products
(Lower Interest Rates)
Loan Products
(Higher Interest rates)
Key Resources
Loan Assets
Cost Structure
Channel Costs
Customer Segments
Personal
Assistance
Retail and Corporate
Customers (Depositors)
Automation where
Possible
Retail and Corporate
(Borrowers)
Channels
Bank Branches
ATMs
Call Centers
Internet
Mobile Devices
Physical and IT
Infrastructure
Interest
Expenses
Relationships
Revenue Streams
Interest Income
Fee Income
Figure 1. Existing General Banking Business Model (source : www.businessmodelgeneration.com)
2
Finance Minister Agus Martowardojo at Press Conference The 1st International Islamic Financial Inclusion Summit (IFIS),
Solo, July 17th 2012.
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Problems Identification and Improvement Target
Table 1. Problems Identification and Improvement Target
Problems and Constraints






High of dismay to have transactions
with the bank
Limited access to get bank services
and specifically require a physical
attendance
Transaction approval restrained by
time and places
Time consuming to compare and
choose preferable banking services
and product
Unorganized market
Monetary policy effectiveness face
distress
Target Based On Reconditioned Business
Model
 Diminishing people‟s dismay to come
over the bank and familiarizing
community by various services and
products
 Reach out more people by internet
access
 Web basis market enable higher
approved transactions
 Time efficient to compare and choose
enticing services and products provided
by banks
 More organized market by Central Bank
 Monetary policy prevail more effective
Research Objective
The paper tries to combine the sustainable and risk manageable concept of business model
which as well supported by the proper business strategy given the identified constraints earlier.
This paper also recommends an establishment of integrated banking model by involving all of
the banks player and Bank Indonesia, in addition to bolster financial inclusion effort. As
monetary authority, Bank Indonesia has a vital role to promote macro stabilization supported by
a sound financial system. The turbulence in the financial market effects macroeconomic stability
which is supposed to be under Bank Indonesia and Government control. In particular, Bank
Indonesia needs to be attentive on financial market expectation and behavior to ensure the
achievement of its objective through all the undertaken monetary policy. It is then believed that
higher financial inclusion will carry monetary policy more effectively in guarding macroeconomic
stability.
In line with Bank Indonesia concept known as branchless banking, this paper suggests some
factors to be embedded into the new model in order to overcome the obstacles faced by most
banks today. Regarding the needs of partnership, the paper agreed with many experts to
enhance supporting telecommunication roles for broader reach of information system.
Furthermore, the new model will also provide higher opportunity to educate community about
banking services and products. The model is adopting simple concept of a goods market, to wit,
the place where the buyer and the seller meet to carry out a transaction based on both sides
agreement. If the goods can have its own market, so does the banking services, but in more
integrative system. The bank market itself doesn‟t comprise only in physical formation where
both sides should have met each other directly. Yet as being supported by the information
technology system, the market also virtually will be connected by internet on the web basis.
Forward, the bank market is expected to be harmonized with the SID. However, essentially the
bank market system and this SID have differences in concept, function, and initial purpose. The
SID has been built to explain borrowers‟ credit performance confidentially before the bank
approving the customer application. The debtor chronicle has been uploaded online regularly by
the banks to SID in Bank Indonesia. It allows other banks to download the information to
conduct smooth process of financing, implement better risk management and identify the debtor
qualification in compliance to Bank Indonesia regulations. Nonetheless, the SID information is
prohibited for marketing purpose. In contrast, the Bank Market system comprises the overall
both sides information, the banks and the customers, not only merely to the debtor but also the
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
depositor, next to be called the customer. The system consists of unique portal for each party
which can be filled out with information such as customer‟s queries, banking offering and
banking approval alert. Moreover, the Bank Market system is permitted for marketing purpose
so it can be accessed at anytime-anywhere via the internet.
The new business model of the Bank Market would establish more integrative banking market
by web basis -branchless- to reach more customers who constitute value proposition in the
banking business. The individual business model is favored to be carried out within the Bank
Market. On the other hand, Bank Indonesia as the monetary authority does not directly control
the market activities. It may only serve as the secretariat of the Bank Market with the
authorization to develop and maintain the system, collect and disseminate data, monitor, and
supervise the activities, and also to take the necessary policy under the prevailing covenant
between the banks and Bank Indonesia (Table 1). Ultimately, the new model will support the
objective of financial inclusion which is to extend the scope of the activities of the organized
financial system. There is a need for a sustain coordinated actions between the banks, the
Government and others to facilitate access to bank accounts amongst the financially excluded.
Paper Methodology
The research begins with data and information collection through widely reading of related
papers and other literature references on banking business model, community saving and
financing behavior (Agral, 2007), domestic banking climate, banking credit characteristic, and
financial inclusion effort in some peer countries (Allen.2012; Beck, 2009); and Arefianto, 2010).
We also have information from various survey conducted by accredited and competent surveyor
institutions i.e. Mars and Markplus Insight comprises of data of internet user development in
Indonesia, middleclass growth in Indonesia, etc. In order to have a proper construction of the
model concept, we conduct some theoretical studying from multi disciplines sources to support
the recommendation given (Figure 2).
A descriptive by comparison method between present conditions and expected ones has been
chosen to analyze and propose the new model in this paper which referred to the business
model developed by Alex Osterwalder. The reason adopting the Osterwalder model is because
it is understandable, simple, systematic and applicable for either embodying the new business
or revisiting the earlier. In accordance with Osterwalder (2004 and 2009), a business model
should comprise of 9 components, namely : Market Segment, Value Proposition, Distribution
Channel, Customer Relationship, Key Resources, Key Partnership, Revenue Stream, and Cost
Structure.
Financial Inclusion, Banking Business Model & Data Facts: Theory Review and
Recommendation
Financial Inclusion:
Financial Inclusion has become a central issue in many developing countries to encourage
banking roles in the economy. There has been some debate amongst specialists around this
term, and there is not still a widely approved definition of financial inclusion, yet most definitions
of financial inclusion to emerge recently have included certain core elements:
 Broad access to a range of financial products and services;
 Financial literacy and financial capability initiatives, and a consumer protection
framework; and
 Minimum requirements for these financial products and services in terms of availability,
quality, cost and sustainability.
Regarding the different characteristic on money supply between developing countries and the
advanced one, the financial inclusion needs a distinct treatment to be carried out. Several
obstacles hindered money supply in the developing countries can be explained as follows:
(i) Unstable banking behavior
(ii) Interest rate rigidity
(iii) Limited access to banking services; and
(iv) Unorganized money market
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Notably, unorganized money has led monetary policy undertaken by Bank Indonesia become
inefficient since the transaction through banking services remain limited. People tend to carry
out a hoarding behavior or keep their money outside the bank and preferably to buy other
assets with their money.
To catch the percentage up, Bank Indonesia has built 5 pillars as the main work frame for
financial inclusion effort (Bank Indonesia, 2012):
Education: Improvement of people‟s awareness and knowledge of financial services and
product, customer protection and financial management.
Eligibility : Development of „un-bankable‟ people through capacity building in order to meet
bank‟s requirement (bankable)
Policy and regulation : To make policy and regulation which support financial inclusion and
abolish unfriendly regulation for MSME (Medium Small Medium Enterprises)
Intermediation Facilitating: Facilitating unfinanced or unbanked people to reach formal financial
services
Distribution Channel: Connecting unreachable people to financial services and product through
implementation of agent banking, mobile banking and branchless banking using technology.
Further, financial Inclusion is formally defined as follows:
“Financial inclusion may be defined as the process of ensuring access to financial services and
timely and adequate credit where needed by vulnerable groups such as weaker sections and
low income groups at an affordable cost”. (Report of Committee on Financial Inclusion, 2008).
From economics theory point of view, according to Cog Douglas, from money market side the
money demand function can be explained by following formula:
L(Υ,і) = k Yη e-βi, k > 0, η > 0, β > 0
The equation above shows i as short term interest, by which is presumed as a variable under
the central bank control. Meanwhile, β, indicates the interest changes sensitivity which affect the
money demand. From this, larger β has been considered analogically with greater banking
transaction. Regarding these variables under the effort of growing financial inclusion, Bank
Indonesia needs to increase the value of β (Sorensen, (2011); Mishkin(2009)).
Business Model:
David J. Teece emphasized, in essence, a business model embodies nothing less than the
organizational and financial „architecture‟ of a business. A business model articulates the logic
and provides data and other evidence that demonstrates how a business creates and delivers
value to customers, and then converts received payments to profits. It thus reflects
management‟s hypothesis about what customer wants, how they want it, and how the enterprise
can organize to best meet those needs, get paid for doing so, and make a profit. A model must
be something more than just a good logical way of doing business. A model must be honed to
meet particular needs. Good business model design and implementation involves assesing
such internal factors as well as external factors concerned with customers, suppliers, and the
broader business environment. Further, Teece also signalled lack of economic literature to even
flag the importance of the phenomenon, in part because of an implicit assumption that markets
are perfect or very nearly so.3 The study by Osterwald (2009), Beck (2009), Miles (2009), Zott
(2006), and Chesbrough (2002) sufficiently supported Teece argument.
Indonesian Economic Data and Surveys (Markplus Insight, Mars, Indonesia Association
of Internet Service Provider-APJII).
Despite the significant hit on Indonesia economics during the late 1990 Asian crisis, Indonesia
now remains one of the fasting growing economies. Historically, from 2010 until 2012, Indonesia
GDP Growth Rate averaged higher than 6% and has led Indonesia to be one of the largest
national economies in Southeast Asia. It has a market-based economy in which the government
3
David J. Teece, Business Model, Business Strategy and Innovation, Elsevier, 2009.
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
plays a significant role by owning more than 164 state-owned enterprises. The government
administers prices on several basic goods, including fuel, rice, and electricity.
This situation is claimed to be underpinned by rising middle class and strong domestic
consumption. In addition to promote Indonesia economies, many analyst and economist believe
that Indonesia's banks and consumer products companies are still expected to report sharp
growth. One of indicators to show remarkable banking growth is the total credit growth from
2010 until 2012. Regarding the technology use in Indonesia, inline with the economy growth,
statistics show that internet user has shown great increase for couple of years. Further,
statistics also shows that Facebook penetration in Indonesia is 19,41% compared to the
country‟s population and 198,61% in relation to number of internet users. It has reached around
50 million user by 2012 (Table 2).
Table.2. Indonesian Data of GDP, Credit Total, Middleclass, and Internet User
DATA
2010
2011
2012
GDP (%, yoy)
6,22
6,49
6,23
Credit Growth Total (in million Rp)
1.765.843.645
2.199.062.148
2.707.861.963
Internet User
42.000.000
55.230.000
63.000.000
Middleclass
119.623.795
128.623.795
137.623.795
Facebook User
38.600.000
41.777.000
51.362.000
Figure 2. Internet user, Number of People in Middle Class and Credit Growth Total
Various private institution on internet user interest come up with some conclusions upon recent
conducted surveys :
1) Approximately 40% of internet user in Indonesia, to wit 24,2 million people, access to
internet more than 3 hours per day.
2) Majority of internet user age range between 13-35 year old.
3) 56,4% including “the bargain hunter” has been compliant to surf the internet searching
for the best offering upon their needs.
4) Internet penetration in Indonesia is approximately 20%-30% all over the region with
Jakarta and Surabaya are the city with the highest density.
5) Internet user profile group has been dominated by worker of 53,3%. The rest group are
student of 16,6%, housewife of 15,3%, college student of 9% and early age children
5,8%.
6) Smartphone is the most employed device to access internet of 70,1%, followed by
personal notebook of 45,4%, Home PC of 41%, personal netbook of 5,6%, tablet 3,4%,
and the rest of 1,3% doesn‟t have personal device.
Recommendation: By integrating the above theory suggested by Teece, literature review,
Indonesian recent economic data, and various survey results on internet user behaviour and
growth in Indonesia, this paper recommends new model as shown in figure 3 and 6. It has
indicated some differences between the existing banking business model and the
recommended one. The new model has included the idea of the centralized market via the Bank
Market on web basis. In addition to the market, there are also factors such as
telecommunication partner and information supporting to serve as a place for data and
information sharing. Hence, the asymmetric information obstacles would be mitigated.
Particularly, a new item like community has been added to act as a new partner for banks as it
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
is believed to bring business sustainability. The community will also play as the agent to
expedite the education transfer and marketing medium concurrently through the power of
“people”. Whilst, the competitor and the expertise are expected to contribute a new relationship
frame which will create more sound competition and partnership new climate.
Literature Studying
Data and Information Collecting
Problems
Identification and
FigureEstablishment
3. Paper Methodology
Model
Descriptive
Analysis
Conclusion
Figure 4. Entities of Business Model Design (David J. Teece)
Key Partners
Key Activities
Investments
partners
Branch Operations
Call center
operations
Technology
vendors
IT Operations
Regulatory
Agencies
Deposit Products
(Lower Interest Rates)
Loan Products
(Higher Interest rates)
Relationships
Customer Segments
Personal
Assistance
Retail and Corporate
Customers (Depositors)
Automation where
Possible
Retail and Corporate
(Borrowers)
Competitor
Centralized Market
via Bank Market
Telecommunication & IT
vendors
Community
Key Resources
Physical and IT
Infrastructure
Loan Assets
Expertise
Channels
Bank Branches
ATMs
Call Centers
Internet
Mobile Devices
Bank Market
Revenue Streams
Cost Structure
Interest
Expenses
Value Propositions
Channel Costs
Interest Income
Figure 5. Additional Factors in Revised Banking Business Model
Fee Income
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
Deposan
A
Bank
BI
Borrower
C
Deposan
D
Deposan
BI
Bank
Bank Market
System
web basis
Bank
Borrower
Borrower
Deposan
B
Bank
Borrower
Figure 6. Present Banking Business Model Scheme
(Bank‟s customer and the Bank) Along with Bank
Indonesia
Deposan
Banks
(A,B,C,D…)
Borrower
Figure 7. Proposed Banking Business Model Scheme
(Bank‟s customer and the Bank) Along with Bank
Indonesia
The presence of Bank Market under Bank Indonesia monitoring frame is expected to drive
financial inclusion and enhance Bank Indonesia‟s role in escorting more effective monetary
policy. The Bank Market system should be adopting the business model run by internet
enterprise which prevails minimum cost to its user yet provides a quick access and precise data
base. In addition to business model construct, this paper has adopted Malaysia government‟s
endeavor in supporting Micro and Medium Enterprises with its Financial Advisory for SMEs.
Nonetheless, this institution has not yet integrated yet all of the banking business actors into the
Bank Market scheme as this paper recommended. We will be able to find valuable information
upon depositors, debtor, and participant banks within integrated information system. All actors
might hold banking activities anywhere, anytime and the activities can be accessed by various
communication tools together with minimum cost approved by the system facilitator, Bank
Indonesia in this case.
In the new model, banks may have information windows inside its own portal which comprises
various offered products and other preferential information. The customers may access the
information directly. Banks will also be able to conduct prompt communication cross-region after
the system detecting customer‟s nearest location. Furthermore, the customer may intensify the
check and pick upon banking services and products offered by all operating banks in whole
region. The alert system in the Bank Market works automatically in detecting and suggesting
both sides to move on next step of the transactions within the nearest coverage. Both sides can
either proceed the deal straight away through the system procedure or arrange further meeting
by physical rendezvous. The Bank Market has augmented a banking business channel to
conduct transaction directly, notwithstanding the old procedure remain hold to satisfy banks‟
assurance upon the customers‟ banking record. Moreover, Bank Indonesia will be able to
monitor the activity and to anticipate fraud indication since the customer documentation inside
the Bank Market system is widely recognized.
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1
receiving
Inquiring
Bank Market
Customer's Portal
upload and update information
upload and update inquiries
Bank's Portal
Contain Banks' Information
receiving
Capture Banks' behavior
upload and update information
offering
upload and update offering (product & services)
upload and update business proposal
Contain Customers' Information
upload and update status etc
download Banks' information
Capture Customers' wants and needs
download customers's information
direct apply process
Consultation & Advisory facility
direct customers selection
receive updated status of all application
Connect people with Banks integratedly
reponse to customer's application immediately
write testimony of Banks service
User friendly system
see testimony from Customers
Automatic alert system to both portal
Enhance BI Monitoring
Support BI Dissemination
Figure 8. The Business Process in Bank Market System
It is also worthy highlighted to consider what have been achieved by Bank Negara Malaysia
(BNM) in developing Financial Advisory for SMEs. This paper has adopted the concept as a
benchmarking basis. BNM formed Information and Advisory Services for SMEs conducted by
SMIDEC as the regulator and the offices has been located region-wide in Penang, Johor,
Kuantan, Kuching and Kota Kinabalu. The information center operates to disseminate
information used by SMEs either by direct meeting or internet service basis. The centre also
presents advisor from related ministry who may serve as the trainer for various programs hold
by SMIDEC4. Today, this kind of services has also been provided by Bank Indonesia and
already has the internet services provided, yet people should first visit Bank Indonesia website
to obtain the information.
Some advantages of the model proposed are as follow:
Table 3. Problems and Expected Solution














4
Banks‟ Perspective
Problems
Expected Accomplishment by Bank Market
Less Competitive
 More Competitive
Narrow Market
 Wide Market
Individually Banking business
 Collective and Competitive Banking
Business
Time consuming
 Time saving
High Asymmetric Information
 Low Asymmetric Information
Restricted Coverage Area
 Extended Coverage Area
Business is Bank Driven
 Business is Bank and Customer Driven
Prolix Banking Transactions
 Straight Away Banking Transaction
Lumbering Business Development
 Rapid Business Development
Traditional Marketing Strategy
 Integrated Marketing Strategy
Bank Indonesia‟s Perspective
Problems
Expected Accomplishment by Bank Market
Low Financial Inclusion
 Higher Financial Inclusion
Less Monetary Policy Effectiveness
 More effectively Monetary Policy
Individually Monitoring
 Collective Monitoring
Inefficient Data Collecting and
 Efficiently Data Collecting and
Organization for Small & Medium Enterprises and Regional Innovation, Small & Medium Enterprise Development
Policies in 6 ASEAN Countries, March 2008.
Proceedings of 3rd Asia-Pacific Business Research Conference
25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1









Dissemination
Elusive Market Behavior
Decision Making Obstacles
Unfamiliar Information Center of
Banking activities conducted by Bank
Indonesia
Unorganized Market




Dissemination
Detectable Market Behavior
Proper Decision Making
Optimizing Information Center of
Banking activities conducted by Bank
Indonesia
Organized Market
Banks‟ Customer Perspective
Problems
Expected Accomplishment by Bank Market
Few Choice Upon Banking Products
 More Options Upon Banking Products
and Services
and Services
Low Approval Opportunity
 Higher Approval Opportunity
Limited on Banking Investment
 More in Banking Investment Portfolio
Portfolio
 Higher Entrepreneurship Opportunity
Low Entrepreneurship Opportunity
 Convenient To Obtain Financial and
Hard To Obtain Financial and Business
Business Consulting
Consulting
Conclusion
Constructing a sustainable and user friendly business model has been essential to support
financial inclusion program. Bank Indonesia who acts as the concerned authority may play a
vital role by embodying the system in more integrative design. The system which is called The
Bank Market in this paper has a concept of simple goods market, yet the banks can meet the
customer in both ways, the internet basis and physical arrangement. Through the Bank Market,
Bank Indonesia may conduct an active monitoring upon the banking activity within one
integrative market place. Moreover, Bank Indonesia will be able to hold in-depth learning and
analyze the financial market behavior, particularly about the banks and the people‟s demand on
banking. The information may also be regarded as a reference before undertaking the proper
policy. The new business model is expected to provide ample benefits at present time as well as
in the future. The market is built by the newer business model which contains of several new
factors to enhance feasibility, user-friendly and goals accuracy of financial inclusion itself. In
addition to support the accomplishment of the new business model, this paper suggest some
steps to do later by the central bank, namely to probe the likelihood of Bank Market
implementation before socializing it further, to plow the probability of banks acceptance and
agreement to participate in the system, and to build the system. It is also suggested to have
further research on information and communication system development to implement the
system in the near future.
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