BASICS FINANCIAL

[ISH1B3] SistemINFORMATION
EnterpriseSYSTEM
(SE)
WEEK 4Introduction
: EVOLUTION OF
FINANCIAL SERVICES
INFORMATION SYSTEM CLASS 2021
SCHOOL OF INDUSTRIAL AND SYSTEM ENGINEERING
Lecturer : Muhardi Saputra, S.ST.,MT 1
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 Paradigm Shift
.

There are two big opportunities in The world needed banking

future financial industry...online services but not necessarily
banking, all financial institutions banks
go online; ...internet finance,
which is purely led by outsiders

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 Evolution of Financial Services
.
Evolution of Payment services begin since 17 th Century

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 Evolution of Financial Services
.
If in the past two decades, financial technology innovation was still rotating on the side of
the bank (for example, core banking system technology), now technology innovation is
happening on the side of the user (customer).

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 Payment Transaction
.

Payment
Transaction

Type of Bank
Cash Non Bank Cashless
Transaction Transfer

Cashless Transaction Credit Debit

E-Money
Card Card

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 Basic Principle of Payment
.

Easy to Use,
Secure,
Convenience

Efficient All Inclusive

Basic
Principle
of
Payment

All Integrated All Method

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 Easy to Use, Secure, and Convenience
.

Easy to use is very dependent on the user experience to be target.

How we design User

Depend on Experience? Depend on Who is the
Easy to use (Customer Journey customers?
of Payment)

Secure or security. Considering this is a financial service, security issues are very important. There
should not be a single weak point in the system being built. And this must be confirmed in a
formal (legal) binding regulation

Convenience is closely related to easy to use. Easy User Experience will create
convenience.
Convenience can also arise without the addition of new business processes created
from the old system. Even if it is forced to exist, it does not make users reluctant to
do so.

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 All Inclusive dan All Method
.

All inclusive means that For now, there is no In order for non-cash
this Payment Method single method that can payments to meet all
can reach all levels of reach all people except inclusive requirements,
society, both in remote cash payments. they must involve all
and urban areas, methods.
people who have bank
accounts or those who
are unbanked, who
have cell phones or
who do not have cell
phones

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 All Integrated
.

Hopefully in the future, this Of all the permitted payment

non-cash payment can be methods, it is expected that
accounted for in real time they can be integrated with
with the state / regional the state / regional revenue
revenue system.. system. .

With integrated payment Integrated payment systems

systems, transactions are speed up cash flow and put more
automatically entered into money in your account. Payments
software and applied to are automatically posted with
ledger … integrated credit card processing

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 Efficient
.
The system must be efficient when viewed from the entire value chain that is formed

Payer Receiver

Service Provider (etc : Government,

Local Institution Banking or Non Banking but handling
Payment Services

Financial institutions are getting more and

more efficient with digital technologies,
digitizing processes, embracing big data and
AI, and adopting new delivery methods
beyond mobile to satisfy customer demand

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 Case Studies : QRIS
.
QRIS dirasa easy to use jika digunakan untuk masayarakat perkotaan
yang memiliki mobilitas tinggi. Tetapi untuk masyarakat harus
Easy to Use, memiliki akun fintech terlebih dahulu dan ada nya koneksi internet
Untuk secure sudah memiliki paying hukum yang jelas
Secure
Dari sisi Convinience rata rata QRIS memrlukan 6 bisnis proses
Convinience
QRIS belum dapat menjangkau seluruh lapisan mayarakat baik
di pelosok atau di perkotaan, hanya masyarakat yang
All Inclusive mempunyai akun fintech yang bisa menggunakan, dan harus
menggunakan smartphone

QRIS belum menerima semua metode pembayaran

All Method hanya bisa menggunakan internet banking, ATM, dan
EDC serta e-wallet,
Pada umumnya metode pembayaran dengan cara ini sudah
All Integrated ada integrasi dengan sistem perbankan tapi hanya pada batas
layanan produk produk Bank seperti ATM, Kartu Kredit, EDC ,
perlu dicari solusi untuk masayarakat di daerah pelosok
Pembayaran bisa lebih efisien karen masyarakat tidak
More Efficient
perlu mendatangi loket loket pembayaran dan
melakukan antrian

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 Financial system Environment
.
The financial applications software development value chain is a useful way to see why
having a good prototyping and development environment is critical to the timely
delivery of good software tools

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 Data Analytics in the Financial Services Industry
.

How data science can benefit Insurance companies

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 Data Analytics in the Financial Services Industry
.

How data
science can
benefit
Banking
companies

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 Big Data Fuels Growth
.

As digital is a mainstream channel The use of big

Big data drives the Internet of Things
data is, however,
for financial services, big data and and helps financial intuitions asset subject to strict
analytics help intuitions distance risks and anticipate customer governmental
themselves from build it and they demands, identifying customer regulations which
will come ” strategies to deliver personas and new markets. It also are necessary to
experiences that are truly relevant enables them to target customers build consumer
for their customers. better than ever before trust and to avoid
. sanctions.

The International Data Corporation (IDC) reports

that public cloud investments are growing, and,
New regulation GDPR and others affect how
at the same time, financial institutions invest in
financial institutions use big data and analytics,
technology to identify cyber treats and to but these measures aim to benefit the consumer.
address privacy issues that could arise from the
use of big data.

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Customer Retention
Understanding user behavior
to offer relevant products and
services.
GDPR compliance
builds trust with consumers
and avoids sanctions for
financial companies.
. cyber-fraud detection.
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Big Data Advantages
.
Targeting new
demographics ML building block
Optimizing marketing big data is one of the IoT
campaigns that fuel elements that fueled the leap to
expansion based on big data machine learning.
and analytics.
Fraud detection Cost reduction
make better customer
big data, analytics, and
decisions, eliminate
machine learning can be
inefficiencies, choose the best
successfully employed for
marketing channels, reduce idle
risk management and
labor time, and so on.
16
 Windows DNA Technology For Financial Services
.
Traditionally, financial institutions have
built separate IT systems and
infrastructures to service different delivery
channels as business opportunities and
demand arose. Typically, this resulted in
different IT infrastructures for different
delivery channels.

Third parties that build solutions to the

Windows DNA FS architecture, however,
will allow financial institutions to build a
reusable, reliable, scalable delivery
channel infrastructure that marries the
best of existing systems with the flexibility
of new systems and takes advantage of
the distributed services provided by the
Windows NT® Server operating system
and Microsoft BackOffice® family of
products.

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 Top Industries Online Spending Statistics
.
The Digital 2019 report by Hootsuite and We Are Social also revealed t he total annual
amount spend in 2018 online and the top industries. Travel is the most prolific of all,
followed by fashion and beauty, and electronics:

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 Digital Wallets Become Mainstream
.
• A study by Zion Market Research revealed that the global
mobile payment technology market will reach USD 3,371.6
billion by 2024 , at a CAGR of 60 % between 2018 and 2024 ,
and Allied Market Research revealed that global mobile
payment transactions will be worth more than $ 4,574
billion by 2023 .
• Considering the costs for EMV chips and magnetic stripes
• and their lack of security it makes sense for banks and other
financial institution to turn to mobile to improve the
customer experience.
• With strong encryption, mobiles usually offer more security
than plastic cards.
• The e- wallet industry is dominated by BigTechs like Google
Pay, Amazon Pay, Apple Pay, Alibaba with Alipay, and
Tencent with WeChat.
• Even Facebook enabled Payments in Messenger, but the
feature was only available in the U.S., France, and the
United Kingdom at the beginning of 2019 .

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 Blockchain Continues to Grow
.
• Although not a new trendit was invented in 2008 by
Satoshi Nakamoto, blockchain technology continues
to grow with potential uses for FinTech, including
lowering costs for infrastructure per TechJury ,
blockchain could reduce 30 % of banks ’ infrastructure
costs.
• However, consumers seem reluctant in adopting
cryptocurrencies and the blockchain industry evolves
as a slower pace than initially predicted.
• Nevertheless, the trend is relevant, as the financial
sector has reportedly spent a total of $ 754 million on
blockchain in 2018 .
• Within the financial sector, blockchain lends itself to a
number of common use cases including regulatory
compliance, cross border payments & settlements,
custody and asset tracking, and trade finance & post
trade/transaction settlements. IDC

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 E-Commerce and E-Money Indonesia Market Update
.
Banked
28%
UnBanked
72%

2018
E-Money 34 Mio Units
535.6 Mio Trx
2008 5.28 Trillion IDR
0.43 Mio Units
2.6 Mio Trx
E-Commerce
Active Internet Users Penetration 76.7 Bio IDR

Of Internet Users used E-Commerce “we are now in Money 4.0 era”

Ex-CEO of PayPal David Marcus

Of E-Commerce Transaction used
E-Money, 94% Used Bank Transfer

Government : 22% Of GDP E-Commerce Contribution Target in 2020

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 Digital Payment Trend in Recent Year
.
The trend are changing consumer behavior and digital transformation of financial services

Customer Experience
The most important factor that will increase the market adoption of
innovative payment technologies is to focus on customer experience

Data Analytics
By understanding the customers better and offering them customized solutions with more
attractive offers and experiences will be important for improving the customer experience

Cashless Society
Together with the digitalization of our lives, it is predicted that cash usage will
decline to 43% in Europe by 2019
Biometrics instead of pin
Biometric authentication, that started to become a standard for smartphones,
enables customer verification to be performed without entering a pin. By 2024, it
is predicted that all payments will be based on biometrics

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 Digital Payment Keys Success Factors Business
.
To be Mass Distribution, Known Brand, Targeted and Regulatory Support

Mass Distribution
With Mass Distribution and Strong of Channel Distribution,
make it our services easy to find by customers

Brand Awareness and Brand Trustworthy

Known to the market and build a trust are important on starting
Digital Payment Business
Targeted Market
Focus on Targeted Market and Targeted Segment in all activity and
strategy

Regulatory Support
Important role of the government to support the digital payment
industry

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 Targeted Market
.

• Targeting :
– Women, as the decision maker in the family
when we can influence her we can get all
family
– Youth netizen, as biggest influencer
Community Women nowadays thru their capability to influence
Targeted Market is a and convince others thru social media
must to have cost – Community, Indonesia typical community –
Youth members will move to any direction followed
effective of Marketing (Nitizen) the leader’s command
Expend
• Marketing message :
Cool Stuff – Women – to inform them that this will bring
Services cost efficiency in their daily life
– Youth netizen – to make them feel that this
Infrastructure is “cools stuff” for them
– Community – to convince the leaders that
this will help them to grow their economic
scale

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 Find More…..
.
To find out more about technology
trends in financial services, you can
read Chapter 1 in the book
"Financial Services Information
Systems "by Jessica Keyes

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 Merci bien
ありがとう
Matur Nuwun
Hatur Nuhun
Obrigado
Dank
Thanks
Matur se Kelangkong

Syukron
Kheili Mamnun
ευχαριστίες
Danke
Grazias
谢谢
Terima Kasih

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