Digital Transformation: Long Overdue or Just in Time?

Speakers

Both financial institutions and customers have had to quickly navigate how they can and want to interact as a result of the pandemic. So, what have financial institutions done to respond to the impact of the crisis while progressing their digital transformation at the same time? Our session on “Digital Transformation: Long Overdue or Just in Time” addressed this question with panelists Martin Holtmann, Manager of MSME Finance and Digital Transformation of IFC, Sameer Vakil, Cofounder & Chief Executive Officer of GlobalLinker, Ongki Wanadjati Dana, CEO & President Director of Bank BTPN, and Rachel Freeman, Executive Director and Chief Growth Officer of Tyme Global.

Martin Holtmann kicked off the session with an interesting quote by Vladimir Ilyich Lenin "There are decades where nothing happens; and there are weeks where decades happen" to describe the rapid changes brought upon by the COVID-19 pandemic. MSMEs have experienced drastic changes during the past few months due to slow-down of the economy and demand during the lockdown. However, the impact can be broken down into 3 segments – Businesses who’ve benefited during COVID as their services/products have become extremely relevant during this period, businesses that were a little impacted and struggled with cashflow crunches but as countries relax lockdowns, their businesses will bounce back to normal, and lastly the businesses that really struggled and did not have the ability to survive this period or cannot bounce back from the COVID impact.

One of the most important aspects to tackle the current challenges is to take a collective view to create order and bring together domain experts who can guide and remodel businesses in need. Particularly on the payment side, access to QR codes and E-wallets have become very important. There is a rising realization of the benefits of digitization within the unbanked sector. According to Sameer, digitization as an agenda needs to be seen as a journey and not a destination. It is always going to be in a continuum state. Businesses need to constantly undergo change through innovation. For an SME to state they are reasonably digitized: - First, they need a digital identity so that more people can discover their products and services. Second, an ability to have a digital profile to enable partnerships and third, a digital catalogue of their products and services. This catalogue translates to e-commerce stores, digitized supply chain, and e-marketing. These 3 digital assets expose businesses to more organizations and increase visibility. Institution must be able to build in the ability to move in and out of cash. Lastly, the new world is not just about e-commerce but also about conversation commerce through social media platforms. Enabling transactions through WhatsApp, Facebook and the likes is also equally important to reach more businesses and consumers.

Key Points

Developing and developed countries both were similarly impacted by the COVID-19 pandemic
Technology-related businesses particularly benefitted during the pandemic. Additionally, at-home sports goods requirement also witnessed a surge in demand. However, many of these brick-and-mortar businesses with limited online presence and defined delivery channels struggled to deliver adequately.
Tyme Global enabled individuals and businesses to open bank accounts at grocery stores by setting up kiosks that could provide instant debit cards and enable cash exchange at the registry. This was hugely beneficial during the lockdown.
BTPN launched Genius, a digital banking service 5 years ago to enable digital transformation in Indonesia.
There are two constituents that digitization serves – SMEs and banks.
Speed of adoption is one of the biggest challenges that SMEs faced during COVID.

Prepared by Aswathi Krishnan and Architaa Kasera, Communication Interns at SME Finance Forum.

"MSMEs experienced 50-70% decline in sales due to COVID. Initially these were unchartered waters but now we are supporting our customers by doing a relaxation programs," said Ongki Wanadjati Dana of @sahabatBTPN pic.twitter.com/3YRG6IIYwG

— SME Finance Forum (@SMEFinanceForum) October 27, 2020

"I think digitization as an agenda is really needs to be seen as a journey and not a destination so it's always going to be in continuum state," said @sameervakil, CEO of our member @GlobalLinker pic.twitter.com/mePJFI9K5o

— SME Finance Forum (@SMEFinanceForum) October 27, 2020

"It's quite challenging to be a new bank right in the middle of this pandemic. In South Africa we have onboarded over a million customers since COVID so we rose significantly and our activity rates have stayed quite high," said Rachel Freeman of @tymebankza at #SMEFF20 pic.twitter.com/6jpaVkcfmP

— SME Finance Forum (@SMEFinanceForum) October 27, 2020

Testimonials

Martin Holtmann, Manager of MSME Finance and Digital Transformation of IFC

Quoting Vladimir Ilyich Lenin: "There are decades where nothing happens; and there are weeks where decades happen."

Sameer Vakil, Cofounder & Chief Executive Officer of GlobalLinker

"I think digitization as an agenda is really needs to be seen as a journey and not a destination so it's always going to be in continuum state."

Ongki Wanadjati Dana, CEO & President Director of Bank BTPN

"MSMEs experienced 50-70% decline in sales due to COVID. Initially these were unchartered waters but now we are supporting our customers by doing a relaxation programs."

Rachel Freeman, Executive Director and Chief Growth Officer of Tyme Global

"It's quite challenging to be a new bank right in the middle of this pandemic. In South Africa we have onboarded over a million customers since COVID so we rose significantly and our activity rates have stayed quite high."

Digital Transformation

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Conference proceedings

Digital Transformation: Long Overdue or Just in Time?