JAKARTA: Earlier today, AC Ventures, a leading Southeast Asian venture capital firm, in collaboration with Boston Consulting Group (BCG), its tech build and design unit BCG X, and the Indonesian Chamber of Commerce and Industry (Kadin Indonesia), unveiled a landmark report titled “Harnessing the Power of (Gen)AI in Indonesian Financial Services.” The report was launched at AC Ventures’ headquarters in downtown Jakarta, attracting significant local and international media attention.
The report, based on a survey of 41 financial institution business leaders and interviews with five fintech startups, offers critical insights into the adoption and impact of AI and GenAI within Indonesia’s financial services sector. It provides strategic recommendations for business leaders on how to effectively integrate these technologies into their products and operations. Additionally, Kadin Indonesia shares key advice for the government as it transitions to a new administration and explores the development of sovereign AI for national interests.
Central to the report is a strategic “Deploy, Reshape, Invent” framework, designed to guide Indonesian financial institutions in maximizing the benefits of GenAI. The findings reveal that 51% of respondents prioritize deploying GenAI for everyday tasks, while 27% see significant opportunities in inventing new products and services powered by GenAI. Globally, a separate BCG study found that while 85% of financial institutions view GenAI as highly disruptive, only 18% have a clear strategy for in-house implementation. This sentiment is echoed by respondents in Indonesia, highlighting a critical opportunity for the country’s financial services sector to lead in the GenAI revolution.
In Indonesia, 61% of financial institutions express confidence in their technological infrastructure for integrating GenAI, particularly about robust data and technology stacks. Nearly half of the sector’s leaders claim they are already leveraging GenAI to enhance customer service, with a third reporting visible benefits. Furthermore, 44% acknowledge the potential of GenAI to revolutionize risk assessment in microlending through innovative data sources and analytical models. Other areas where GenAI is seen as beneficial include productivity, rapid lending, fraud management, and hyper-personalization.
As GenAI use cases become more widespread, major Indonesian banks and financial institutions are advancing their initiatives from pilot stages to scalable projects. These efforts aim not only to expand financial access and inclusion but also to ensure compliance with Indonesia’s Personal Data Protection Law.
Despite the enthusiasm, many Indonesian financial institutions are still in the early stages of GenAI implementation. The report indicates that while 41% of respondents are piloting GenAI and conducting proof of concepts, scaling these initiatives to deliver substantial business value remains a challenge. Only 37% feel they have the necessary talent, and upskilling employees to use AI tools is one of the lowest priorities cited. Furthermore, only 29% are confident in their operating models for GenAI readiness. For GenAI implementation to succeed, business readiness must align with technological readiness.
Andy Lees, Managing Director and Partner at BCG X, emphasized the transformative potential of GenAI in Indonesia’s financial sector, noting its ability to broaden financial access, improve customer experience, and facilitate the rapid scaling of services. However, he cautioned that many current initiatives are tech-led pilots that have yet to translate into scalable business value. Lees highlighted the need for a strategic framework that encompasses technical implementation, governance, operations, and talent, ensuring that AI initiatives align with business goals for lasting impact.
The report calls on business leaders to adopt a strategic, holistic approach to GenAI integration, focusing on governance, technology, people, and operational processes. This approach will enable Indonesian financial institutions to navigate and lead in the GenAI space, turning challenges into opportunities for growth and innovation.
Pandu Sjahrir, Founding Partner at AC Ventures and Department Head of Economic and Financial Technology at Kadin Indonesia, emphasized the importance of learning from the private sector’s experience with AI and GenAI as Indonesia’s new administration considers building sovereign AI. He pointed out the need to enhance regulatory frameworks and accelerate investment in local infrastructure for GenAI development, which includes upgrading Indonesia’s energy infrastructure with renewables and sustainable financing. Sjahrir noted that AI and GenAI could significantly elevate Indonesia’s economy, transforming not just the private sector but also state-owned enterprises and government agencies. Effective deployment, he stressed, requires sustainable data centres powered by renewable energy, strict privacy laws, and strong public-private partnerships. The report, he added, will also serve as input for the White Paper on Economic Development and Policy Directions for 2024-2029, currently being prepared by Kadin Indonesia.
Gunawan Woen, Co-Founder & CEO of ESB, Indonesia’s largest fully integrated restaurant management SaaS platform and an AC Ventures portfolio company, shared how AI has become a game changer in ESB’s ecosystem. He highlighted that AI supports small and medium-sized enterprises (SMEs) in the F&B sector by acting as a financial expert, business consultant, marketing analyst, and forensic auditor—roles that were previously unaffordable for many business owners. Woen emphasized that GenAI, in particular, has been instrumental in helping ESB accelerate AI implementation within the F&B industry, adapting Large Language Models into Specific Language Models to better serve the sector.
