TO: Professor Morris
FROM: Sarah Ritchie
DATE: September 4, 2012
SUBJECT: How BTPN can improve operations through the use of mobile banking
As you requested, I analyzed BTPN’s current operations and recommend that Mr. Jerry Ng employ mobile banking to transform the current system of micro-loan repayment.
The use of mobile banking will influence the success of BTPN by:
* Keeping them at the forefront of innovation
* Allowing for more customer flexibility
* Increasing loan repayment efficiency
BTPN will confirm its competitive position as an innovator and create more value for its product through mobile banking. More flexibility for customers will ...view middle of the document...
If denied, the branch manager places the loan in a reject box with other applications that are incomplete or rejected. BTPN then sends a loan agreement to the customer and disperses funds in his or her savings account. Middle and high-income Indonesians provide these funds via their BTPN savings accounts. Once a month, a relationship officer visits the customer to request loan repayment. BTPN facilitates repayment with the use of mobile EDC devices, which update the central loan system in real time. See Exhibit 1 for a visual explanation of BTPN’s current micro-lending process.
BTPN’s microfinance process with the use of mobile banking
If BTPN implements mobile banking, the microfinance process will change in the method of repayment. The relationship officer will no longer directly visit and request payment from the customer, the customer will repay loans on his/her own. Observe Exhibit 2 to see these changes.
How BTPN should implement mobile banking
BTPN is known for innovation and technology, thus mobile banking will further secure that competitive position and fit into the existing model. BTPN should pair with a local cell service provider to provide network coverage to all of its microfinance customers. BTPN should then purchase smart phones for all of their current customers. They should install a secure application on the phones that allows for the free direct transfer of funds from an encrypted and monitored personal account.
By supplying their customers with a bundle of technology, BTPN will create more value for their product and thus will be able to charge higher interest rates for their microloans....