MANDIRI SAHABATKU:

TOWARDS STRATEGY FOR THE INCLUSION OF MIGRANT

WORKERS
PPM 9TH REGIONAL BUSINESS CASE COMPETITION

TEAM NAME:

GUN-TANK
 1. INTRODUCTION
Indonesian Migrant Worker (IMW) became an important factor to improve
Indonesian economic condition. IMW was the one of the most foreign exchange
contributors to the country with amount of USD 2.2 billion in 2017. IMW contributed via
remittance in the needs of providing money for their poor families in the country. Not only
financial problems which hinder the prosperity of IMW while abroad, but also there are a
lot of problems until now. Ranging from the weak government regulation or supervision -
resulting a lot of illegal IMW break free- until safety and protection issues of IMW while
abroad. To overcome those issues, and also aligned with mission - to make the country
prosperity, PT Bank Mandiri (Persero), Tbk (BMRI) conducted Mandiri Sahabatku
Program (MS) to help IMW reshape their future by instilling entrepreneurial mindset and
turn them to become an independent citizen.
Most of IMW used bank accounts as one of the channels for remittance. This
condition became a major concern for BMRI, because the firm must cultivate the potential
market of IMW as effective as possible, give them a better services for fulfilling their
needs. Moreover, BMRI should considering that there are still a lot of illegal workers used
the hard cash channel due to limited access for banking and remittance services. Thus,
BMRI should think thoroughly to resolve that issue while expanding their market.

2. PROBLEM IDENTIFICATION AND ISSUE BASIS

2.1. Issue Basis
Table 2. 1 Placement Data of IMW in 2016, 2017, As shown in Table 2.1, there is growing
& 2018 until August (Source: BNP2TKI)
intention of Indonesian people to be IMWs.
There are 9 millions of Indonesian IMWs who
already working abroad (World Bank, 2017),
thus Indonesian government need the State
Owned Enterprise Bank to be able to facilitate
the remittance flow inside so the workers are
provided to send their income back home to
their family. SOE Banks like BMRI have

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responsibility to expose those IMWs with banking services, so hopefully they can be sure
with their future even after retirement.
Unfortunately, according to Sitanggang (2018), compared to other SOE Banks like
BNI and BRI, BMRI has the lowest growth YoY (Year on Year) of remittance as shown
in Table 2.2. This event has been caused by the stagnant of incoming transaction from
remittance which stated by SVP Consumer Deposits Bank Mandiri, Trilaksito Singgih
Hudanendra. To conclude, the issue basis that BMRI has to put in mind is, “BMRI has not
using their full capacity to gain the potential market from the remittances of IMW”.

Table 2. 2 Kontan - Bisnis Remitansi Perbankan Terus Bertumbuh (Sitanggang, 2018)

Bank Name Remittance (inside) Growth yoy per July

2018

1. PT Bank Rakyat Indonesia (Persero) Tbk 38.0%

2. PT Bank Negara Indonesia (Persero) Tbk 22.7%

3. PT Bank Mandiri (Persero) Tbk 2.5%

2.2. Problem Identification

With this condition SOE Banks products are also being questioned, don't they think
that remittance flow also gave them a benefit on the banking industries? So, why they won't
approach the opportunity to grow the “banking services and product for IMW”? Are IMW
excluded from the “common” costumer? So, how BMRI can develop a product that will
best fit for the IMW that can directing BMRI to capture the growing market of remittance
service (Figure 2.1). To be able to do that, first the bank must find the problems on why
the existing product do not perform as wanted.

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 Figure 2. 1 Forecasting of Indonesia Remittances (Trading Economic, 2018)

Based on Sitanggang (2018b), similar as mentioned before that BMRI has the
stagnant incoming transactions, however the small growth was contributed by outgoing
transactions. This was caused by BMRI has not set targets for remittance business. Mr.
Singgih also explained that BMRI has already construct a strategy, which is Mandiri
Sahabatku Program to boost up the remittance business. Correlate with Table 2.2, we can
conclude that the problem is Mandiri Sahabatku Program (MS) has not well-
performed to increase BMRI revenue from remittance business. Hence the analysis on
next chapter will be focus on how the “new” MS will be the major contributor strategy of
BMRI to increase their revenue in remittances.

3. ANALYSIS
Considering the problem that MS still lack of contributing in revenue from
attracting new participants as customer for BMRI, we developed an analysis framework
(Figure 3.1) which consist of several analysis tools that could generate a strategy to solve
the problem. Using the issue basis as the boundary in structuring the strategies, we conduct

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the external analysis using PEST (Political, Economic, Social, and Technology) tool for
knowing the IMW recent condition and trends in the future. Moreover, we conduct internal
analysis about BMRI operations in fulfilling customer demands based on secondary data.
After that, we can make SWOT Analysis, and produce several strategies. Those strategies
will be selected using Multi-Weighted Scoring Model. So, we can make a suggestion for
the “new” MS as the product which has the ability to escalate the BMRI revenue in
remittance.

Figure 3. 1 Analysis Framework

3.1. PEST Analysis

We have conducted PEST analysis based on informations which correlate the
current, and also future condition of IMW. In other word, we consider issues that might be
affect the Mandiri Sahabatku Program. This analysis has already been shown in Appendix
page (Exhibit 1). From PEST analysis, we found 7 opportunities and 4 threats as a result
of this analysis. From politic factor, we can conclude that the IMW condition and
regulation are getting better, even though there is still a large portion of illegal worker who
are still difficult to get the access to the banks. In economic factor, Indonesia shown a
promising condition for IMW and also its candidate which those people with household
income ranging from IDR 1 - 3 million (Deloitte, 2017). From social factors, lots of IMW
have elementary school education background, hence it’s still hard to make them become
wise and smart in the short period of time. Although, the number of IMW being sent out is
increasing since 2016. In technology factor, Indonesian people already aware and tends to
addict with ease of access for information, proved by the majority of people have
penetrated by internet (We Are Social & Hootsuite, 2018). Unfortunately, with more
advance the technology become, the emergence of FinTech will become the biggest
inevitably threat.

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 3.2. Internal Analysis
After we know the opportunity and the threats, we make an internal analysis to find
BMRI strengths and weaknesses. We conducted this analysis through functional analysis
and through comparison with other competitor’s products or programs which could defeat
the program or could be defeated by the program. We compared BMRI with BNI and BRI,
excluding CIMB Niaga (Exhibit 2). Because CIMB Niaga has the lowest remittance
growth rather than the growth of BMRI (Sitanggang, 2018). BMRI has strength in MS,
which is BMRI provided Internship Program for retiring IMW. This has never been existed
in other competitor’s program. Through functional analysis, BMRI has already been
approved by several achievements. One of them which ranked 1st position in Top 3 Trusted
Management Bank by Warta Ekonomi-Best Banking Brand 2017. Nevertheless, BMRI
didn’t successful to make in position of Top 3 Popular Bank in Customer Satisfaction by
the same rating organization previously (Figure 3.2).

Top 3 Popular Bank (Customer Satisfaction) Top 3 Trusted Management Bank

1. PT Bank Rakyat Indonesia (Persero) Tbk 1. PT Bank Mandiri (Persero) Tbk

2. Bank Central Asia Tbk 2. PT Bank Negara Indonesia (Persero) Tbk

3. Bank Tabungan Negara (Persero) Tbk 3. PT Bank Syariah Mandiri

Figure 3.2 Warta Ekonomi - Best Banking Brand 2017 (Nurfakihiswara, 2017)

The major concern has to be the popularity of BMRI based on customer satisfaction
survey. Research by Fitria et al (2016), has showed that “customer satisfaction has
influence to customer loyalty”, this can be evidence against marketing management. This
statement backed by the fact that the growth of remittance service of BMRI was still low
(Table 2.2). Mr. Singgih, from BMRI also said that in 2017 BMRI was not set any
remittance revenue target to be pursued, which conclude the lack of concern for remittance
service from BMRI. Other weaknesses of MS based on comparison with competitors
(Exhibit 2) consist of less-interesting benefit offerings (such as, insurance protection,
pension fund management, ease for other banking services, and guarantee of IMW future
to become a branchless banking agent), limited coverage area of remittance service, and
the absence of mobile apps for remittance service.

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 3.3. SWOT Analysis
After we conducted external and internal analysis of BMRI in remittance business,
we have all the data to generating SWOT analysis (David & David, 2017) and we obtain a
few strategies which produced by SWOT Matrix Analysis (Figure 3.3). From SO strategy,
BMRI should use their reputation as trusted management bank to utilize some opportunities
such as supportive government, majority of IMW used bank accounts, and growing number
of IMW by expanding the MS program, which including expand the internship program
that can facilitate all retired-IMW. This will attract more IMW by ensuring them the
prosper future by MS program.
Then, from ST strategy BMRI should use its strength to avoid the impact of large
number of illegal IMW, by providing some promotions that give them a low cost to become
an IMW, but in returns they have to satisfy some requirements that will give benefits for
BMRI in the long run.
From OW strategy, BMRI should improve their weakness by taking advantages of
external opportunities, and this can be achieved by BMRI makes integrated financial
service for IMW and their families through cooperation with Desmigratif. By this strategy,
BMRI using all opportunities to improving their less-interesting benefit offerings and their
lack of concern in remittance service.
For WT strategy, with the inevitable threat of emerging FinTech,considering the
weaknesses that BMRI has, BMRI should create partnership with well-known FinTech of
remittance service which could improving BMRI remittance service. Finally all of those
strategies must be selected with Multi-Weighted Scoring Model, based on absolute
criterion and wanted criterion.

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 Figure 3. 3 SWOT Matrix

3.4. Multi-Weighted Scoring Model

As we obtained a few strategies to answering BMRI problem, we must select the
desired strategy which can fulfill the criterion that could solve the problem. We determined
the absolute criterion consist of the ability to increase market share in remittance business
and the ability to reduce the number of IMW who used hard cash channel of remittance. In
addition, we also determined the wanted criterion which are the strategy could improve the
prosperity of IMW and their families, improve the financial literacy / education of IMW
and their families, and this strategy could also provide access to other banking services,
also it provide easy, fast, and secure transaction of remittance. The decided weight comes
from our brainstorming session, and then we times the weight by the score (1 = very unable
to fulfill the criterion to 5 = very feasible to fulfill the criterion). Based on the total score
(Figure 3.4), we decide to choose the OW strategy, which is BMRI should make integrated
financial services for IMW and their families through partnership with Desmigratif.

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 Figure 3. 4 Multi-Weighted Scoring Model.

4. CONCLUSION AND SUGGESTION

4.1. Conclusion from Analysis
As we done analyzing the issue basis with utilizing several concepts to generate
strategy, we decided that OW strategy would be the best fit strategy for BMRI to boost up
their remittance revenue. Thus, BMRI shouldn’t conduct Market Development strategy,
except for Related Diversification strategy. Related Diversification strategy is when a
business adds or expands its existing product lines or markets (David & David, 2017). In
this case, we have identified that the problem is MS program has not well-performed to
increase BMRI revenue from remittance business. With related diversification strategy, we
want to add something new combine with the MS program to expand the remittance market
of BMRI.
4.2. Suggestion Strategy
The strategy which “make integrated financial services for IMW and the family
through Desmigratif” was aimed to develop MS program, and also this strategy comes
from WO or OW column in SWOT matrix, hence we named it WOW Strategy. We
believe the WOW strategy could really able to make a big impact for IMW and their
families’ future, especially for BMRI remittance business. In this chapter the strategy will
be explained the strategy map and balance scorecard, including its timeline and financial

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projection. We also make a business model canvas of the product, which is mobile
application that become a main role in WOW strategy.
The WOW Strategy recommends BMRI to make a remittance service app, named
Sahabatku App, so it can be used by IMW while abroad and their family in the home
country. Instead of both of them using private account each, through this app, they will use
sharing-account. We believe if they starting to use sharing accounts, and also from
financial education that had already given to them in the beginning of MS program, they
will be better in managing their money. Before running the Sahabatku app, BMRI should
be preparing its foundation for ease of transaction by collaborating with other banking
firms abroad. Rather than building branches outside Indonesia, BMRI makes a partnership
with other banking firms abroad. BMRI should ensure first through PPTKIS that the
employer of IMW always give the salary through the saving accounts of those banking
firms, and it will be easier if IMW could directly remit the money from the teller or ATM
of those banks to the shared-accounts of BMRI Sahabatku app. Hence, BMRI get the
revenue from remittance inside transactions. So, Sahabatku App is not an app to remit the
money from abroad to home, but it is a monitoring app of IMW and their families’ finance.
If BMRI want to make the app to be able to remit from abroad, BMRI should dealing with
the Financial Services Authority in each foreign countries, and it will take a very long time
to get the permission for the app.
We hoped that through Sahabatku app, it will be an e-wallet for IMW families in
the village. BMRI should develop this together with government in expanding Desmigratif.
As the Desmigratif expands, so does the Sahabatku app penetration. With one of the
objectives of Desmigratif, creating less cash society, BMRI cooperate with the government
in providing Sahabatku app that will be able to replace hard cash in the village. So if the
villagers or families, want to buy their daily needs in the small traditional markets, they
can use the Sahabatku app through Sahabatku Agents. Sahabatku agents can be a
shopkeeper, a butcher, vegetable vendors, etc who have a business in the villages. These
agents should have a smartphone, so that they could do the transaction with IMW families,
who also have a smartphone, and both of them using Sahabatku app. They do the
transaction using several ways, such as QR code, SMS, and any other ways that will user-
friendly to be used by them. Based on our external analysis, we believed that even in the

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rural place in Indonesia, smartphones already penetrated there with the possible cheapest
prices.
To conclude, WOW Strategy recommend BMRI to build the Sahabatku App, which
its functions are monitoring remittances through the sharing-accounts of IMW and their
families, can be used for daily needs of IMW families back home as the e-wallet by the
transactions with Sahabatku Agents in Desmigratif. By the Sahabatku App, IMW and their
families will manage their money even better than before, coordinate each other to build
their future together with no boundaries. Also by this app, Sahabatku App will help the
government to create a less cash society in Desmigratif that perfectly align with its
objectives. WOW Strategy, will not only boost up their remittance revenue but also make
a “closed-ecosystem” in the Desmigratif. The reason is BMRI provides the only service
that has become a basic need for IMW and their families in the village.
4.2.1. Strategy Map and Balance Scorecard (BSC)
To implement the WOW strategy map, we first construct a strategy map for the
sake of successful WOW strategy implementation. This would consist of learning and
growth section, process or business internal section, consumer section, and finance section.
Learning and growth section focus on preparation of human resource and other preparation
that needed. Process section describe the operational process of the strategy. In this
strategy, the main processes are the development of Sahabatku mobile app, marketing to
villages to gain agents and customers from IMW and their families, and the enlargement
of the area for remittance by proposing partnership with several foreign banks. From
customer section we can see that the increasing number of our targets, which are the agents,
IMW mobile account, and the partner-foreign banks. From them, it will lead to the
increasing number of transaction and we can get the customer satisfaction. In the end, from
finance section we can see that this strategy will increasing the revenue growth from
remittance that lead to remittance profit growth. The detailed strategy map can be seen at
Figure 4.1.

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 After we developed the strategy map, we make BSC (Balance Scorecard). In BSC,
each steps from strategy map will
have the measurements, duration,
targets, milestone, resource
allocation, and which department
should take the responsibility
(Exhibit 3). After we made the
BSC of WOW Strategy, we
construct the timeline to measure
the duration of each activity and
realization of the milestones.
Besides that, we also make the
financial projection to see if WOW
Strategy could produce a great
benefit for BMRI. Furthermore,
we create the BMC (Business
Model Canvas) as our helping tool
to describe even deeper about the
outline of new business that
Sahabatku App will create.

Figure 4.1 WOW Strategy Map

4.2.2. Business Model Canvas of Sahabatku App

This Sahabatku product strongest proposition is the ecosystem, the app enabling all
the subscriber from agents, IMW and their family, even common customer to manage the
money as the Sahabatku app provide tools to manage all financial services just like digital
banking app. This type of app, combine with the matching marketing strategy to capture
the targeted market. Sahabatku is meant to be the new product line from BMRI to counter
the problem of popularity market shared the BMRI had.
Key Partners, Agents (someone who has a business) of Sahabatku will get benefit
from the customer opportunity. Sahabatku got the subscribers numbers that will attract the

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potential agents to become the agents of Sahabatku. Desmigraatif governance that puseh
by Central Bank of Indonesia, has the same value proposition that Sahabatku have in
payment and transaction ecosystem. To add up the remittance and other services BMRI
had to collaborate with foreign banks and financial services so they can provide fast, easy,
and reliable remittance monitoring and other financial services.
To run the business of Sahabatku, the needed resources are capital expenditure to
start the product, so they can build the technology, to facilitate the work of human resources
knowledge in improving the product.
In proposing the value of money management, sharing account, and payment and
transaction access (ecosystem), the customer relationship, and key activities will detailed
that. Money management will be able to make the IMW and family save via saving
activities on the app. The sharing account will help IMW and family ini monitoring the
remit flow and transaction activity. Agents in customer relationship will help the IMW
family back home for doing payments off electrical bill or other payments. Marketing team
here have purpose first they had to teach and attract potential agents, and IMW that going
abroad at the government office for IMW registration. They will be the one to manage and
make sure Sahabatku deliver the best service.
Then the interface for all this activities will be the agent store, Government office,
and social media, also the app itself. For BMRI, to develop the product that will be used
by customer segmented as IMW, IMW Family, and Agents, they have to invest in
marketing, training, and IT infrastructure. Then the business will flowing the revenue
stream of the remittance, payment, transaction, and savings (developed as third parties
fund).
The customer journey (Exhibit 4), explain further how the application will work for
the targeted segment, especially the IMW. The journey experience will be better when
BMRI able to integrate all their strength in infrastructure, other products (services), and the
most trusted management value to boost the utility of Sahabatku app for even wider
opportunity.

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 Figure 4. 2 Business Model Canvas of Sahabatku App.

4.2.3. Timeline and Financial Project

As we constructed the WOW Strategy Map and the BSC, we develop the timeline
of the WOW strategy implementation (Exhibit 5). We already stated that this strategy are
consist of four main activities, which are Sahabatku Mobile App Development, Marketing
for Sahabatku Agents, followed by Marketing to IMW about the app, and Enlargement of
coverage area for remittance. Each main activity has its own work packages. To construct
the timeline to be better understandable, we use Gantt chart format. Based on the timeline,
we decided that this strategy should be able to implement in 3 years, until 2021. Also we
disperse the 3 year period into quarters, so in each 3 months, BMRI should check the
Project Status as they need to get back on the track if there is some deviation occur while
implementation on progress.
After that, we construct financial projection which consist of Revenue Projection
(Exhibit 6) and Costs Projection (Exhibit 7). To create the revenue projection, we used
basis on the BSC and data on total number of villages in Indonesia. From the BSC, we
extract the target of penetration of village, combined it with the total number of villages in
Indonesia (Figure 4.3), thus we can obtain target number of village in each year.

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 Moreover, we made assumption
which based on the average of
families that live in the village,
there are more than 150 families, so
we take the minimum number so
that each village, there are 150
families. The reason is we want to
know what if the condition of
penetrated village does not create a
lot of customer as we want. We also
used the deposit interest of
Indonesia as the discount rate for
the input of NPV (Net Present
Value). The costs projection is
generated using Resource
Allocation section in BSC. From all
base assumptions, we get the
positive NPV. Which means that
this strategy is very suitable to
generate benefits and also profit for
the BMRI remittance growth. With
the amount around of IDR 31
billion, we are very sure that WOW
Strategy, with the implementation
of Sahabatku App, will develop
MS program even better, and will
be able to make the 7% of IMW
Figure 4.3 Total Targeted Village for Revenue Projection used Hard Cash channel, moving to
use BMRI accounts as their channel, even better, as their daily needs. WOW Strategy
prosper the IMW and families.

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Part 2.

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ATTACHMENTS

Exhibit 1 PEST Analysis

Exhibit 2 Internal Analysis (Blue = Strength, Red = Weaknesses)

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Exhibit 3 Balance Scorecard of WOW Strategy - The Implementation of Sahabatku App

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Exhibit 4 The Customer Journey Description

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 Exhibit 5 Timeline of WOW Strategy Implementation

Exhibit 6 Basic assumptions for Revenue Projection of WOW Strategy

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Exhibit 7 Costs Projection of WOW Strategy

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