AC Ventures: Nearly Half Of Financial Institutions In Indonesia Have Implemented GenAI

Launch of AC Ventures report (photo: Dinda Buana/VOI)

AC Ventures, a leading venture capital firm in Southeast Asia, together with the Boston Consulting Group (BCG), the BCG X design and technology unit, and the Indonesian Chamber of Commerce and Industry (Kadin), released a report entitled 'Harnessing the Power of (Gen)AI in Indonesian Financial Services.'

Based on a survey of 41 business leaders of financial institutions and interviews with five fintech startups, this report reveals important insights into AI's adoption and impact as well as GenAI in Indonesia's financial services sector.

The report states that in Indonesia, 61 percent of financial institutions are confident in their technological infrastructure needed to integrate GenAI, especially in the context of data and a solid technology system.

In addition, nearly half of local sector leaders claim to have taken advantage of GenAI to improve customer service, with a third reporting of the benefits seen.

Furthermore, 44 percent of local leaders acknowledged the potential of GenAI in revolutionizing risk assessments in microlending through more innovative data sources and analytic models.

In addition to customer service and microlending, four other areas where GenAI is considered useful in this industry include productivity, fast loans, fraud management, and very precise personalization.

However, despite the high enthusiasm for GenAI's ability, many Indonesian financial institutions are still in the early stages of implementation. Where only 37 percent feel they have the necessary talent, and upskilling employees to use and interact with AI tools is one of the three lowest basic priorities mentioned.

Meanwhile, only 29 percent of respondents felt confident in their operational model for the readiness of GenAI. In order for the implementation of GenAI to be successful, business readiness needs to be in line with technological readiness.

"Our findings show that this technology has been quickly adopted by both large financial institutions and fintech companies. However, many initiatives are still in the form of pilot projects led by technology and have not succeeded in producing real business value on a large scale," said Andy Lees, Managing Director and Partner at BCG X.