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Accelerating Financial Inclusion Through Digital Banking

Marchy Tio Pandapotan, Sylviana Maya Damayanti

Abstract


Abstract. Financial inclusion is one of key elements in financial well-being concept. However, financial overview of Indonesia shows a gap between current and the goal financial inclusion index targeted by the government. One of the main issues is intermediary facilities and distribution channel. Based on data, financial institutions still have to rely on traditional office branch that turns out costly. This research aims to find a business solution for PT Bank Negara Indonesia (Persero), Tbk., as a financial institution to expand the reach of financial institution to help closing the gap of financial index. Current Reality Tree analysis is used to find the root cause of the low financial inclusion index. Based on the Current Reality Tree analysis, high investment and operational cost are the root causes for the undesirable situation. Digital banking is proposed as a solution for the root causes because it provides more convenience and lower cost than opening branch offices in order to deliver financial services and products. Based on the cost and benefit analysis, digital banking application has higher cost and benefit ratio (2.042) than setting up branch office (1.199). Thus, digital banking application is a more affordable alternative channel to deliver financial services and products. Keywords: Financial Inclusion; Digital Banking; Financial Services and Products; Banking Abstract. Financial inclusion is one of key elements in financial well-being concept. However, financial overview of Indonesia shows a gap between current and the goal financial inclusion index targeted by the government. One of the main issues is intermediary facilities and distribution channel. Based on data, financial institutions still have to rely on traditional office branch that turns out costly. This research aims to find a business solution for PT Bank Negara Indonesia (Persero), Tbk., as a financial institution to expand the reach of financial institution to help closing the gap of financial index. Current Reality Tree analysis is used to find the root cause of the low financial inclusion index. Based on the Current Reality Tree analysis, high investment and operational cost are the root causes for the undesirable situation. Digital banking is proposed as a solution for the root causes because it provides more convenience and lower cost than opening branch offices in order to deliver financial services and products. Based on the cost and benefit analysis, digital banking application has higher cost and benefit ratio (2.042) than setting up branch office (1.199). Thus, digital banking application is a more affordable alternative channel to deliver financial services and products.

Keywords: Financial Inclusion; Digital Banking; Financial Services and Products; Banking

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