AC Ventures, a leading venture capital firm in Southeast Asia, 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 major sector report titled “Harnessing the Power of (Gen)AI in Indonesian Financial Services.” The launch event took place at AC Ventures’ headquarters in downtown Jakarta, drawing both local and international media attention.
The report, based on a survey of 41 financial institution leaders and interviews with five fintech startups, offers vital insights into the adoption and impact of AI and GenAI within Indonesia’s financial services sector. It provides strategic recommendations for private sector leaders on integrating this technology into their products and operations. Additionally, the report includes key guidance from Kadin Indonesia for the government as it transitions to a new administration and explores the development of sovereign AI for national interests.
Deploy, Reshape, Invent
At the core of the report is a strategic “Deploy, Reshape, Invent” framework, designed to help Indonesian financial institutions effectively incorporate GenAI. According to the findings, respondents place higher importance on ‘deploying’ and ‘inventing’ over ‘reshaping’ internal processes. Specifically, 51% of respondents are focused on deploying GenAI for daily operations, while 27% see significant potential in inventing new GenAI-powered products and services.
Globally, a separate BCG study revealed that 85% of financial institutions view GenAI as a highly disruptive technology, yet only 18% have a clear in-house implementation strategy. This global trend is mirrored in Indonesia, highlighting a critical opportunity for the country’s financial services sector to lead in GenAI adoption.
In Indonesia, 61% of financial institutions express confidence in their technological infrastructure for GenAI integration, particularly in terms of robust data and technology stacks. Nearly half of the sector’s leaders report already using GenAI to enhance customer service, with a third noting visible benefits. Furthermore, 44% recognize GenAI’s potential to transform risk assessment in microlending through innovative data sources and analytical models. Other areas where GenAI is seen as advantageous include productivity, rapid lending, fraud management, and hyper-personalization.
As GenAI applications expand, major Indonesian banks and financial institutions are moving from pilot projects to scalable initiatives. These efforts aim to broaden financial access and inclusion while ensuring compliance with Indonesia’s stringent Personal Data Protection Law.
Despite the enthusiasm surrounding GenAI, many Indonesian financial institutions remain in the early stages of its implementation. The report indicates that while 41% of respondents are piloting GenAI use and conducting proof of concepts, scaling these initiatives to deliver significant business value remains a challenge. Only 37% believe they have the necessary talent, yet upskilling employees to use and interact with AI tools is ranked among the lowest foundational priorities. Additionally, just 29% are confident in their operating models for GenAI readiness. For successful GenAI implementation, business readiness must align with technological readiness.
Andy Lees, Managing Director and Partner at BCG X, said, “The potential of (Gen)AI in Indonesia’s financial sector is clear – it can broaden financial access, improve the customer experience, and facilitate the rapid scaling of services, among other possibilities. Our findings show that the technology has been rapidly adopted by both large financial institutions and fintech firms. However, many initiatives are tech-led pilots that are yet to translate into real business value at scale.”
Lees added, “Financial institutions would benefit from a strategic framework for integration that encompasses everything from technical implementation and governance to operations and talent. Moreover, such a framework allows for outcomes to be clearly measured, ensuring that AI initiatives continuously align with business goals. This will be critical to the delivery of lasting transformation and real business impact.”
A Strategic Guide for Public and Private Sector
The report calls on business leaders to adopt a strategic, holistic approach to GenAI integration, stressing the importance of strengthening governance, technology, talent, and operational processes. By focusing on these foundational elements, Indonesian financial institutions can not only keep pace in the GenAI race but also lead it, turning challenges into opportunities for growth and innovation.
Addressing how Indonesia’s incoming administration can benefit from the private sector’s experience with AI and GenAI implementation, Pandu Sjahrir, Founding Partner at AC Ventures and Head of the Economic and Financial Technology Department at Kadin Indonesia, stated “With the incoming administration looking to build sovereign AI, there’s a push to enhance regulatory frameworks and accelerate investment in local infrastructure for GenAI development. This is prompting vital discussions on upgrading Indonesia’s energy infrastructure with renewables and sustainable financing. AI and GenAI have the potential to elevate Indonesia’s economy by transforming not just the private sector, but also state-owned enterprises and government agencies.”
Gunawan Woen, Co-Founder & CEO of ESB, Indonesia’s largest fully integrated restaurant management SaaS platform and AC Ventures portfolio company that has implemented AI, said, “AI has become a game changer in ESB’s SaaS ecosystem, particularly in how it supports small and medium-sized enterprises (SMEs) in the F&B sector by acting as their financial expert, business consultant, marketing analyst, forensic auditor, and more—professions that were previously too expensive for these business owners to afford. From ESB’s perspective, instead of replacing jobs, AI offers many crucial services that were previously inaccessible to most business owners in Indonesia. GenAI, in particular, has been instrumental in helping ESB accelerate AI implementation specifically within the F&B industry.”
This report provides strategic guidance for both the private and public sectors, while also emphasizing the importance of cybersecurity to protect national data assets. It will also serve as input for the White Paper on Economic Development and Policy Directions for 2024-2029, currently being prepared by Kadin Indonesia.
Read the full report at https://acv.vc/resources/
