Chapter I introduction



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CHAPTER I INTRODUCTION


This case study is a field of study, based on a specific case discussion which is telling the Internet-Banking strategic decision at BNI. BNI Internet- Banking was one of the BNI e-channel services for BNI TAPLUS Saving users. The time period of this case study was limited between in 2006 until 2007. On March 2006, BNI had launched BNI SMS-Banking. Other e-channels that had been deployed by BNI were BNI ATM, BNI Phone-Plus, and BNI Mobile- Banking, Along with the rapid trend of internet technology in business application especially in the e-commerce trend could be seen as an opportunity for banking industry. BNI decided to complete the five e-channel services as part of service improvement which was inline with the expectation and the need of the business as stated on BNI’s vision and mission.

BNI was known as the first bank formed and owned by the Indonesian Government. It had large number of customers spread in Indonesia and some other countries. BNI provided innovative banking products and services to serve its customers and faced with totally tight technology based banking competition from its rivals, including the use of internet technology.

In this era, banking over the Internet has attracted increasing attention over the past several years from bankers and other financial services industry participants, also to the business press, regulators, and law-makers, society both in Indonesia and in other countries. In part, this is due to the rapid and significant growth in electronic commerce ("e-commerce"), and the notion that Electronic- Banking and Electronic-Payments will likely advance more or less in tandem with e-commerce.

Efficient and effective Internet-Banking will be potential to make the customers become more loyal and more have the sense of belonging to the bank and in the end also will gain and get more people to be interested or become attracted with the Internet-Banking services facility as a service improvement for BNI-TAPLUS’s customers. Indirectly, the Internet-Banking also be able to educate its customers in doing or conducting a self-banking transaction online with a different way at all.

Reviewing the needs of IT infrastructure to support businesses and considering that internet is as a cost effective solution for an IT infrastructure, many people, in this case Indonesians are beginning to peak at what is called e- commerce. They try to do businesses via the internet. Start by selling services such as specific information (software, hardware, news, etc.) on the website and advertisements by selling products such as goods, books, cars, foods, stuffs, etc. or even provide both, also conducting an event such as online seminars,

webminars, tutorial, collaborating, conferencing, job sharing, etc. In addition, industry analysis outlining the potential impact of Internet-Banking on cost savings, revenue growth, and increased customer satisfaction and convenience, also generated considerable interest and speculation about the impact of the internet on the banking industry.

The public policy issues emerging with the development of Internet- Banking are generating increased attention from banking regulators and other government officials as well. To date, however, because there is also little systematic information on the nature and scope of Internet-Banking, much of the analysis from the benefits and the impact of Internet-Banking have been based on anecdotal evidence and conjecture. No wonder all of the largest national banks in the world especially in Indonesia had offered Internet-Banking. For addition, BNI’s position as one of the largest national commercial bank offering Internet- Banking perform relative to other national commercial banks with respect to profitability, cost efficiency, and other characteristics in terms of BNI case. Among institutions offering Internet-Banking, large banks are much more likely than small banks to offer a broader range of services via the Internet.

BNI as one of the largest bank in Indonesia which had so many customers at any segments to serve, in case of the rapid growth of internet users in Indonesia and in optimizing it’s service improvements, in April 2007 had been launching the BNI Internet-Banking as part of its e-channel services. By

providing its Internet-Banking channel services which was linked on the BNI’s corporate website at www.bni.co.id and also had a direct link at the https://ibank.bni.co.id, offered a new way by doing some banking transactions over the internet.

We hope with this BNI Internet-Banking case study would be useful especially for both sides as part of BNI’s contribution of its CSR (Corporate Social Responsibility) to share the success story and gain the lessons learned from the past experiences in terms of the Internet-Banking issues and the trends of going global opportunity as a case study to one of academic educational material for the students especially for Business School in Indonesia. This moment would also be an opportunity for BNI as a new marketing channel to promote, gain prospects and socialize its innovative products and its high-tech new services in the segmentation of educational environment.


1.1. Case Description


This case study tells about considerations of why BNI decided to go Internet-Banking and how BNI made strategic decision to improve its services by completing its e-channels services including the Internet-Banking facility as service improvement. In creating strategic decisions and considerations background with related approaches had been made in considering decisions for the case of whether it was the right time for BNI to go Internet-Banking or not go.

On this case study thesis is divided into five chapters. The background of selected case area is presented in the first chapter followed by the scope of discussion which is limited in the year of 2006. The introductory chapter is followed by Chapter two that provides the literature review or academic theories related to the Internet-Banking case. Chapter three describes the methodology of creating this case study that presents the detailed idea about how the case will be conducted and this includes the data collection. Chapter four tells about the case content discussion, which is also divided into four sub-titles according to the Binus Thesis Guidance, starting from the company background, the industry background, the scope of discussion and the case study content itself that tells the main point of case discussion attached as the appendix-I. Chapter five contains the lessons learned gained from the case, limitation and conclusion. As additional enclosure information also provides the BNI Corporate Organization Structure, the BNI’s Internet-Banking screen snapshot proposal, the Internet-Banking’s User Profile Information, list of Board of Directors and list of Board of Commissioners.


This case study is focusing on the BNI Internet-Banking services as part of the BNI e-channel services also part of today’s banking services trend that must have and limited to the story of consideration strategic decision for BNI to go Internet-Banking or not go.

The case story was beginning in 2006 from the ideas of Sabdo Trihidayat for the next also known as Mr. Dody, as the General Manager of Consumer

Funds & Financial Services Division at that time, who had the initiatives to drive forces in completing the five e-channels banking services, by pushing the Internet-Banking implementation immediately to compete and ready to go live in response to the changing banking industry and competitive conditions environment.

The moment was in March 2006, at Wisma-46 building located at Sudirman Road in Central-Jakarta, once upon a time after the grand launching of BNI SMS-Banking on March 5th 2006, at the same time Mr. Sabdo straight took the initiatives to continue the BNI Internet-Banking implementation immediately. He assigned Mr. Amirul Wicaksono which is as E-Banking Group Head at the Consumer Funds and Financial Services Division, and brainstormed for the purpose of continuing to complete the five e-channels services. All of the five e- channels banking services is under the E-Banking Group unit responsibility concern. Mrs. Kartika Dwinovitasari was chosen, appointed and assigned to be


the Internet-Banking Project Leader or Project Manager, under control of Mr. Dody himself. Both of them were still at e-Banking group unit in Consumer DJK-Division.

Before starting to develop the Internet-Banking project, she had read the blue-print and found that those about the Internet-Banking plan had been there from A to Z had already been prepared, but it had been out of date anyway which means it didn’t meet the recent today’s needs and trends anymore. The general manager at that time, who was Mr. Sabdo, wanted that all the electronic-channels

must had been ready completed and must available for the TAPLUS-Saving’s users and accessible to do banking’s transactions with global access anywhere anytime. There was already available the BNI e-Channel Services which are ATMs, Phone-Banking, Mobile-Banking, SMS-Banking, and also Internet- Banking which were mentioned as the Big five weapons for BNI e-channel to be ready to fight into this very tough e-banking war competition from now on and in the future.


1.2. Objectives

The objective of this thesis is to gain the lessons learned from the BNI Internet-Banking’s past experience. In this case we would like to learn, to share and to gain the applied knowledge experience from the BNI’s success stories of e-Banking implementation by writing down this case study which is limited on consideration to decide whether BNI go Internet-Banking or not go in the scope of corporate strategy and business strategy coverage area.
Recently, educational or academic institution especially for Business Schools in Indonesia is relatively lack of Indonesian’s case studies. By giving and sharing the lessons learned from this case is expected that we can learn from the past story on how the problem or dilemma situation could had been solved. Hopefully, this case study will be useful for academic/educational purposes and gaining respect from BNI’s stakeholders as part of its Corporate Social

Responsibility (CSR) and also can be a promotion channel in introducing the
Value-Added Services (VAS) provided by BNI.

1.3. Scope of Study

The scope of this case study discussion is limited only to the BNI Internet-Banking in case of the dilemma question on whether BNI decided that it was the right time to go Internet-Banking or not go. Please note that this case study was compiled from published corporate website, corporate intranet and published corporate book documentation sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



1.4. Case Issues

In 2006, the only one major BUMN bank that had already owned the Internet-Banking services delivery channel was Mandiri Bank. There were also five major private banks that had already owned the Internet-Banking services as part of their e-channel services; they were Permata Bank, BII, Lippo Bank, BCA, and Mega Bank.

Recently a tough competition from BNI’s rivals with so many features and high quality services in e-Banking channel including Internet-Banking services facility have been part of performance measurements. Being in line with

BNI’s objectives as stated on BNI’s Vision and Mission to be a leading bank in services and constantly strives to enhance the Quality of Service (QoS) in the interest of customer satisfaction, Mr. Sabdo thought that it was a must for BNI to go Internet-Banking immediately with no longer waiting anymore.

Further more, BNI’s position as the first bank in Indonesia and being one of the largest government (BUMN) bank in Indonesia with so many types of customers spread in other countries worldwide, so BNI realized and had to make strategy in taking actions for the internet trend opportunities to improve services as well as achieving the BNI objectives as a customer centric bank in line with the vision which is mandatory to put full attention and deep understand to BNI customers’ needs as the impact of globalization era. However, the blue print of BNI’s Internet-Banking had been there since the year of 2002, but not implemented yet. Mr. Dody as the General Manager of Consumer Funds and Services Division at that time wanted that all e-channel services must be completed immediately and be ready in competition with other Indonesian e- banking channel services.






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