Behind Bank Neo Commerce’s quest to enhance financial inclusion in Indonesia

In partnership with Huawei Cloud

For many people, being able to use digital financial services is just a fact of modern life. So it might surprise them to know just how difficult it is for others to access them.

Consider Indonesia, where around 80% of the population is considered unbanked or underbanked because of the country’s highly fragmented geography. Someone in rural Sumatra, for example, would have to travel for miles just to access an ATM, pay bills, or apply for a loan.

That’s the problem that Bank Neo Commerce (BNC) aims to solve with a “one-stop solution” through its Neobank app, says IT director Chen Jun. The app lets customers access various financial services like bank accounts, time deposits, loans, online transfers, and bill payments without having to visit a physical branch.

“The idea is very simple: We’re trying to bring the bank into the cellphone and Indonesians to the modern world, where every service can be brought online very easily,” he says.

Enabling financial inclusion

By making financial services more accessible through digitalization, BNC is enabling Indonesia’s thriving digital economy, where high smartphone penetration rates and a burgeoning GDP per capita has made it Southeast Asia’s “most important digital financial services market.”

“People need financial services but they’re hard to obtain, and financial institutions and internet companies see an opportunity in that gap,” says Jun. “If geography prevents you from delivering something offline, then there is likely a chance you can do it online, which is what BNC is trying to do.”

Since 2010, Indonesia’s digital banking scene has flourished, with players such as BNC working to close the country’s financial inclusion gap. At the end of 2022, EY reported that roughly 42% of Indonesians have engaged with some form of digital banking product or service.

BNC is also focused on making financial services cheaper for customers and small businesses.

“Three or four years ago, transfer fees in this country were really high, which introduced a lot of friction into every economic activity,” he says. “Our free fund transfer services help reduce that friction, especially for small merchants and businesses who are reluctant to use online services because of charges.”

These solutions can also be used by BNC’s corporate clients and partners who have integrated the bank’s services into their own systems.

The problem of scale

While BNC’s success might have been built on a simple idea, creating the infrastructure needed to support its diverse range of solutions was a more complicated journey.

“When you’re trying to provide lots of different services to meet each client’s needs, the fact is that their habits and preferences will keep changing,” says Jun. “That necessitates lots of trial and error on our part, which means that our system needs to be able to handle lots of fast iteration.”

He adds that the bank’s initial strategy was to grow its customer base quickly by providing a comprehensive range of solutions. This meant that its system needed to be able to handle both volume of customers and breadth of services, along with constant tweaks and finetuning – and any downtime was out of the question.

“We were faced with the challenge of not only ensuring our applications were adaptable but also transparent and flexible,” recalls Jun.

In a normal week, BNC releases two or three updates to its app – a grueling pace by any measure – placing pressure on its teams and tech stack to be flexible and adaptable.

“If our customer numbers go up by 10x, then our facility has to grow at the same pace,” says Jun.

Right partner, right time

In looking for a tech partner to help it with these capacity needs, BNC came into contact with Huawei Cloud and found its stack the perfect fit.

For one thing, Huawei offers adaptability thanks to an open architecture. This lets BNC manage multiple applications and resources on a single platform.

Jun explains that the Huawei Cloud Stack is able to back up the Neobank app’s features across 20 different cloud services. This also means that BNC can easily integrate its partner services into the platform.

In addition, the stack uses big data, AI, and virtual assistants to automatically manage traffic through its system with minimal disruptions.

Jun also highlights the support that BNC receives from Huawei in running the stack. Apart from a 24/7 support hotline, Huawei helps BNC with the maintenance of its data center. According to Jun, as the bank continuously improves on its services, having the support of Huawei’s cloud stack has helped minimize the impact of system updates on customers, ensuring business continuity.

“We also work closely with them when it comes to building in more equipment or infrastructure,” he shares. “Whenever we scale up, we discuss with Huawei’s team to figure out what equipment or new software would be most compatible.”

“BNC is an established bank, but in many ways we operate like a startup,” adds Jun. “So having that kind of constant support is really important to us.”

Expanding plans

The ongoing partnership with BNC and Huawei Cloud will continue to grow as the bank steps up its expansion into Indonesia’s customer base.

Jun says that in the near term, BNC will be focused on reaching out to younger users, who are set to be the country’s fastest-growing customer segment. Huawei’s system will be essential to these plans, allowing the bank to meet the generation’s preference for cutting-edge services.

Looking further ahead, BNC has plans to expand its business into new markets, which will necessitate investments in more software and hardware. Jun believes that working with Huawei will help the bank remain robust without overburdening its operations.

“Compared to our early days, there will be more room to grow,” he says. “Once we reach a certain size, we will start shifting our focus to business continuity, and the security and stability of our system.”

Huawei Cloud is a leading provider of information and communications technology infrastructure with a track record of supporting Indonesia’s digital banks to bring transformative financial inclusion to its people.

To find out more about how Huawei Cloud can support your business growth, click on this link.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.