Their partnership with Cloudera has given them valuable insight on customer behavior.
The COVID-19 pandemic has gravely struck Indonesia, where it now stands with the second-highest number of cases in Southeast Asia. Its resulting economic fallout did not spare the country’s banking and financial industry, with subdued results expected to manifest themselves in Q2 this year, according to Fitch Ratings.
In order to weather the fallout, state-owned Bank Mandiri has had to leverage its digitalisation efforts and partnership with US-based enterprise data cloud firm Cloudera. “It’s becoming very, very important for the management to monitor the performance of the bank, the conditions of our customers, our distribution, and our employees,” said Billie Setiawan, the lender’s head of enterprise data management and bankwide data & analytics.
Bank Mandiri’s data journey with Cloudera started in 2017, according to Setiawan, where the first objective was to centralise its data. Since then, it has snowballed into real-time monitoring of liquidity and daily branch transactions, tracking of employee health status, and loan restructuring programs -- tools that are important especially in the time of a pandemic.
“We now have machine learning capabilities, where we can build more accurate statistical models to be able to predict what is the next best offer for our customers. Those are the things that have been evolving since we started on data analytics,” Setiawan explained.
And they’re not stopping there. Since there has been a spike in e-commerce transactions, the bank has been trying to learn about their clients’ behaviour in hopes of serving them better, whilst also improving Bank Mandiri’s revenue and profitability.
Asian Banking & Finance caught up with Setiawan to discuss in detail how the pandemic has affected the country’s finance sector, Bank Mandiri’s data and digitalisation journey, how they have benefitted from their Cloudera partnership, and what the future holds for their data transformation.
Can you talk briefly about how the pandemic affected Indonesia’s banking and finance sector, and the measures you've taken to survive?
It has definitely impacted our customers, our financial performance and network distribution, and our employees. Since the declaration of the pandemic in the middle of March, we immediately came up with all the essential arrangements and emergency planning. The pandemic has really impacted my teams, especially in relations to data analytics.
First, in terms of our customers, how can we help them continue their business? We’ve provided a few initiatives and suggested restructuring programs on their credit. Secondly, how do we also run our risk management, risk appetite, as well as our liquidity monitoring? We also have to tackle our market situations because we have many customers from various industries, including wholesale businesses all the way to retail businesses.
For our network and distributions, we had to temporarily close some branches to make sure that the virus would not spread. At the same time, we needed to take care of our service to customers to ensure that busy branches stay open with the right protocols andbanking services remain operational.
Lastly, for our employees, we needed to manage our capacity in the office, to ensure that all the critical functions are working - from customer care and risk management to collection and IT.
How would you assess Bank Mandiri’s data journey so far? How have you leveraged data to weather through the pandemic?
The data analytics team at Bank Mandiri started quite a few years ago. These functions and enterprise data management have been with Bank Mandiri since 2014-2015 to ensure that all data is centralised in the same platform. We have to make sure that we have the same understanding that we need to govern and secure the data.
Secondly, data analytics is part of all business activities at Bank Mandiri. It has evolved into the default way we approach and visualise data so it helps with important decision making. We leverage machine learning to build more accurate models and predict the best offer for the customer.
These are some of the areas we have been evolving since we started on our data analytics journey. Of course, we are not stopping here as we continue to understand the customers’ preferences to serve them better and scale our business.
Are there any notable data-backed trends that have emerged from your customers and your operations amidst the pandemic?
Yes, definitely. Our customers are now focusing on wholesale information for how to keep their business afloat. Initially, we helped them acquire more credit -- for example, we gave them a special rate, so we can continue to assist them. On the retail side, online banking is gaining popularity and people are reducing physical visits to branches.
Can you give a quick walkthrough of your real-time monitoring of liquidity and bank transactions? What factors help you decide which branches to prioritise first and temporarily close, without sacrificing your clients’ time?
We assess and analyse our data in real time to compare situations prior and during the pandemic. If we see that transactions are decreasing on a daily or weekly basis, we may close a branch temporarily and move the employees to assist clients in other locations. We also need to balance working from home and the office to make sure that social distancing is in place.
The most important thing for us in liquidity monitoring is to give liquidity to the customers in need. These customers may be struggling to keep their business afloat or pay employees as they deal with the current situation. We need to know these details on a real-time basis to give and maintain liquidity in the bank while we give benefits or more credits to the customers. Liquidity is on the funding side so we need to make sure that our relationship is balanced between this and the credit side.
Can you talk more about your partnership with Cloudera? How did Cloudera enhance your banking services, and which business segments benefitted from this partnership?
We began our partnership with Cloudera in 2017 when big data platforms were becoming popular. We have had an enterprise division where we began to grow a solid partnership with Cloudera to expand our big data ecosystem - from gathering the data from our core systems and consuming the data, to converting the data into actionable insights. We asked ourselves - how do we use the data from our big data platform for real time reporting and updates, and build more machine learning and advanced analytics capabilities?
We also leverage Cloudera Data Science Workbench (CDSW) to enable our data scientists to build statistical models for machine learning.
What measures have you taken to assure clients and employees that their data is secure and protected?
We have a dedicated team to govern our data. We invest in understanding the source and quality of data to assess how to best secure it.
Prior to working with Cloudera, anybody could access the data, so the risk of leakage was high. Now, we have metrics to standardise and control data access to limit usage to only those who have a proper reason to do so.
We’re still on our digital transformation journey, so we will continue to improve our systems to enhance security and ensure compliance with government regulations.
How do you envision Bank Mandiri’s long-term digital and data transformation? What do you think are going to be the biggest challenges along the way, and how would the bank resolve these?
Bank Mandiri is a sizable bank with branches across Indonesia - we are a brick and mortar business. We also have online banking and are embracing our digital capabilities. However, how do we make sure that we can still interact with customers who do not have online banking profiles? We are currently improving our online banking systems to make sure we can communicate all the relevant activities and offers to customers.
We strive to ensure that all who come to our physical branches as well enjoy the best and most suited service for their needs. The customer service representative can recommend the right offers and the relationship is dynamic as consumer needs continue to evolve.
We also work to embrace digital strategies on data analytics and learn more about customer behavior as it directly impacts the way we work.
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