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BFI Finance - Streamlining business operations through digital transformation
As a pioneering multi-finance company in Indonesia, BFI Finance has been at the forefront of financial solutions since its inception. First listed on the Jakarta and Surabaya Stock Exchanges in May 1990 (now consolidated as the Indonesia Stock Exchange with ticker code BFIN), BFI offers a diverse range of products from home loans to both secured and unsecured personal loans.
Challenge and Objective
Despite its storied history and considerable market presence, BFI Finance has primarily relied on manual processes, a method becoming increasingly unsustainable in a digital-first world. Recognizing the need for innovation to continue its growth trajectory, BFI has embarked on a journey towards digital transformation.
The company’s operations have traditionally been segmented with each branch functioning autonomously, leading to discrepancies in efficiency and performance. In partnership with McKinsey & Co, our goal was to thoroughly analyze BFI’s entire business operations to identify key areas for digital enhancement.
Project Scope
Over a 12-month period, our mission was to direct the creative and strategic development of five key digital products aimed at enhancing operational efficiency across the board:
Internal Agent Applications
Equip Agency Relationship Executives (AREs) and Business Agents with tools accessible on-the-go to enhance mobility and efficiency in field operations. These applications are designed to improve accessibility and responsiveness, allowing agents to manage client interactions and updates seamlessly from any location.
User-Friendly Digital Applications
Simplify and enhance the interface between customers and agents to ensure smooth and efficient transactions. This platform aims to make the loan application and management processes more intuitive and straightforward for both customers and agents, thereby improving user experience and operational efficiency.
Internal Management Platform
Centralize and streamline operations across all branches to provide management with comprehensive oversight and improved operational control. This platform is intended to unify various business processes, enhancing the ability of management to monitor, analyze, and direct activities effectively across the organization.
Merchant Integration Tool
Facilitate a seamless connection between consumers and BFI Finance directly at the point of sale to provide real-time loan approval updates. This tool is designed to enhance the merchant’s ability to offer on-the-spot financing options, effectively supporting upsell opportunities and improving customer purchase experiences.
Organizational Structure Overview
Recognizing this structure is vital for accurately identifying the operational needs and challenges that our digital solutions aim to address. By clearly understanding each layer’s function and interaction within the overall hierarchy, we can more effectively design digital products that streamline communication, enhance efficiency, and support the specific operational dynamics at each level.
This tailored approach ensures that our technological interventions are precisely aligned with the strategic objectives of BFI Finance, fostering a smoother integration and more impactful results.
Performance Criteria
- Activity Performance: Included tasks like onboarding Business Agents, booking and attending meetings, and other daily tasks to ensure KPIs were met.
- NTF (Net Transaction Performance): Represented the total loan amounts secured, making the training and onboarding of Business Agents crucial.
Head Office
Provides strategic oversight and coordinates high-level operations.
Branch Managers (BM)
Each branch is led by co-managers overseeing teams of supervisors.
Supervisors (SVPs)
Manage Agency Relationship Executives (AREs), focusing on performance and compliance. ARE performances are based on NTF and Activity.
Agency Relationship Executives (ARE)
Key personnel managing Business Agents with responsibilities split between operational activities and achieving Net Transaction Performance (NTF).
Business Agents (BA)
Operate on a commission basis, tasked with client acquisition and loan facilitation, pivotal in grassroots financial outreach. Often the face of BFI in their communities, these agents are typically well-connected individuals who use their social influence to facilitate business. BAs work on commission only, and their performance is based on NTF.
Operational Challenges
Challenges in Real-Time Monitoring of ARE AGENTS
The mobility of Agency Relationship Executives (AREs) presents significant challenges in maintaining oversight. Without real-time monitoring capabilities, it is difficult for supervisors to verify if AREs are meeting their daily responsibilities, leading to potential gaps in performance management and reporting accuracy. Implementing mobile-enabled monitoring tools could provide the necessary oversight to ensure that AREs are effectively and efficiently completing their tasks.
Addressing Staff Turnover through Fair Performance Evaluations
High staff turnover, especially among Business Agents, is often a consequence of inconsistent and perceived unfair performance assessments. These disparities can demotivate staff, feeling their efforts are not justly recognized or rewarded. Establishing a transparent, data-driven evaluation system that accurately reflects individual contributions could help stabilize workforce dynamics and improve retention rates.
Curbing Non-Compliance and Unauthorized Absences
Incidents of non-compliance and unauthorized absences among ARE agents underscore a deeper issue of accountability within the workforce. These behaviors can disrupt operational flow and negatively impact the overall productivity of the finance operations. Implementing stricter compliance checks and a robust attendance system can help mitigate these issues by enhancing accountability and ensuring adherence to organizational policies.
Minimizing Human Errors in Record-Keeping
The prevalent manual processes in record-keeping are prone to human errors, which can lead to inaccuracies in crucial operational data. These errors not only affect day-to-day operations but can also have long-term repercussions on strategic decision-making. Transitioning to automated, digital record-keeping systems would reduce human error, streamline data management, and improve the reliability of operational records.
Research and Operational Review
Purpose and Goals of the Operational Flow Map
The operational flow map was meticulously designed to not only capture the current state of operations but also to pinpoint inefficiencies, redundancies, and potential risks within existing processes. By visually mapping out the workflows, we could identify key areas where digital interventions could significantly enhance efficiency and accuracy.
Mapping for Digital Opportunities
For instance, areas with heavy manual data entry, multiple handoffs between departments, or any process steps where delays were frequently observed were marked as high priority for digital overhaul.oundational tool served to lay out the entire landscape of BFI’s workflows, illustrating the complex interactions and processes that define daily operations across various levels of the organization.
Critical Findings and Opportunity
Issues Identified
- Inefficiencies in Manual Processes: The flow map reveals multiple stages involving manual interventions, such as performance reviews and report preparation, which are prone to delays and errors.
- Insufficient Oversight: The operational flow indicates a lack of real-time monitoring capabilities for supervising ARE activities and Business Agent interactions, which could lead to misreporting and reduced accountability.
- Limited Feedback Loops: The current flow suggests that while there are periodic reviews, there may not be sufficient mechanisms for continuous feedback, which is essential for immediate corrections and enhancements in operations.
- Fragmented Communication Channels: The map shows several levels of hierarchical communication, which could cause delays and potential misinformation as messages pass through multiple layers.
- Risk of Non-Compliance: The complexity and manual nature of processes as shown in the flow map might lead to gaps in compliance, especially if not all data is timely reviewed or correctly processed.
Areas of Opportunity
- Digital Integration: Implementing digital tools that automate and streamline processes such as data entry, performance tracking, and compliance checks can reduce time and errors associated with manual operations.
- Real-Time Monitoring Systems: Developing systems that provide real-time insights into each level of operations from AREs to the Head Office can enhance transparency and accountability.
- Enhanced Communication Platforms: Integrating comprehensive communication platforms that facilitate direct and instant messaging across different levels can reduce the time delays and prevent the distortion of information.
- Continuous Feedback Mechanisms: Establishing systems that allow for real-time feedback from lower levels directly to management can help in quicker resolution of issues and better adaptation to operational challenges.
- Proactive Compliance Assurance: Utilizing technology to continuously monitor compliance and automatically flag potential issues can ensure adherence to regulations and reduce legal risks.
Customer-Facing Secured Loan Applications
In parallel with the discovery phase for internal solutions at BFI, I spearheaded the development of a customer-facing application process. The primary goals were to simplify the existing process, enhance completion speeds, and minimize drop-off rates, thereby improving overall customer experience and operational efficiency.
Old Process
Traditionally, once a Business Agent (BA) onboarded a client, they collected personal details and physically submitted these to an ARE agent who manually entered them into the BFI system to check for approval. This method was not only time-consuming but fraught with delays, especially when additional documentation was required, involving back-and-forth postal communications which prolonged the decision-making process.
New Process
While the internal systems were still under enhancement, certain technical capabilities were established to streamline the application process:
• Clients received special login credentials allowing them to access and complete their loan applications autonomously.
• Pre-loaded vehicle details expedited the process, although clients retained the ability to modify these as necessary.
Atomic Design Strategy
Recognizing the project’s scale, I adopted an atomic design system from the outset. This approach facilitated the rapid iteration of components that could be reused across future products, enhancing design consistency and deployment speed.
Designing for Efficiency and Engagement
To transform the application experience, I implemented a series of targeted design techniques proven in previous projects with major healthcare providers:
- Progressive Disclosure: Reducing user overwhelm by displaying only necessary information per screen.
- Intuitive Navigation: Ensuring users can effortlessly navigate through the application.
- Optimized Forms: Implementing auto-fill and segmenting forms to quicken data entry.
- Fast Load Times: Optimizing resource use to guarantee quick application responsiveness.
- Visual Cues and Micro-interactions: Employing subtle animations for guidance and feedback.
- Consistent Interface: Maintaining a uniform design language across all application touch points.
- Step-by-Step Progression: Simplifying complex tasks into digestible actions.
- Real-Time Error Handling: Offering instant feedback to correct input errors immediately.
- Mobile Optimization: Adapting the design for an optimal mobile user experience.
- Image-Based Selections: Utilizing visual elements like car logos for easier and faster selections.
ARE Application: Streamlining Operations and Enhancing Productivity
The internal ARE application is designed to play a pivotal role in streamlining BFI’s internal operations and enhancing workforce productivity. This tool provides management with the reassurance that tasks are being effectively carried out, and offers easy access to actionable data, allowing for real-time insights into various operational aspects.
Operational Insights
Derived from our detailed operational flow map, the ARE application is tailored to optimize numerous activities, including:
- Providing ARE agents with a clear overview of their daily tasks.
- Simplifying the creation and management of tasks, previously handled manually by supervisors.
- Enabling direct booking, scheduling, and updating of meetings with Business Agents (BAs) through an integrated application interface.
- Incorporating a built-in calendar that syncs with third-party services for enhanced coordination.
- Delivering metrics on personal and BA performances, including lead generation, total NTF, and monthly activity completion rates.
- Facilitating the review of BA performances and alerting supervisors to any notable performance declines.
Despite initial considerations, direct communication features between AREs and BAs were excluded from the final design to manage costs and because WhatsApp is the preferred communication tool in Indonesia.
User-testing Overview
User testing was a critical component of the development process, conducted extensively during the wireframing stages. Feedback from these sessions was meticulously analyzed by our UX team and shared with stakeholders, ensuring any identified issues or potential enhancements were swiftly addressed in subsequent development sprints.
Wireframe Development
The design of the ARE application wireframes was governed by several key criteria:
- Accessibility for All Skill Levels: With a diverse workforce spread across Indonesia’s vast archipelago, the application was crafted for simplicity to accommodate users with varying levels of tech-savviness.
- Scalability: The design anticipates future expansion, both in features and user base, ensuring the application can evolve without compromising performance.
- Clear Data Visualization: All data presentations are designed to be straightforward and easily digestible, suitable for quick comprehension by AREs nationwide.
- Familiar Design Patterns: The application utilizes common design conventions familiar to the Indonesian user base, reducing the learning curve and enhancing user acceptance.
- Cultural Considerations: Every aspect of the application respects the unique cultural nuances of the Indonesian digital landscape, ensuring a user-friendly experience across diverse regional settings.
This comprehensive approach ensures the ARE application not only meets current operational needs but is also well-equipped to adapt to future demands, driving BFI’s digital transformation forward effectively.
BA Application: Enhancing Field Efficiency and Oversight
The objective of the Business Agent (BA) tool is to seamlessly integrate with the ARE tool to form a comprehensive system that boosts operational efficiency of BFI’s field activities. This tool is crafted to elevate productivity levels among Business Agents by providing them streamlined access to essential data and tools for effectively managing daily activities. It also ensures that management gains real-time oversight of field operations, thereby aligning field activities with BFI’s strategic business goals through enhanced visibility and control.
Operational Insights
Derived from our detailed operational flow map, the ARE application is tailored to optimize numerous activities, including:
- Streamlining Processes: To optimize the time BAs spend onboarding clients, enhancing their efficiency and allowing them more opportunities to acquire new clients.
- Data Visualizations: To furnish BAs with real-time performance tracking, freeing up AREs from frequent updates and motivating BAs to increase client engagements to hit higher NTF bonus brackets.
- Loan Calculation Tools: Enable BAs to instantly calculate potential loan amounts based on client vehicle values.
- Historical Performance Data: Provide access to historical meeting and performance data to help BAs plan and improve their strategies.
User-testing Overview
Consistent with the ARE tool, user testing was a pivotal component of the BA tool’s development, conducted extensively during the wireframing stages. Insights from these sessions were crucial in refining the design, with feedback integrated directly into the development cycle to ensure the tool met user needs and expectations.
Wireframe Development
The design of the BA tool leveraged 80% of existing components from the customer-facing and ARE applications, embodying efficiency and consistency across tools. Key adaptations included:
- Repurposed Calculator: Minor content modifications were made to adapt the calculator for BA use, catering to the unique calculations related to commission and loan assessments.
- Customized Data Visualizations: Adjusted to reflect the BA’s commission structure and the milestones necessary to reach higher commission brackets.
- Educational Tool Tips: Considering the average BA age of 42, interactive educational tooltips were integrated to facilitate ease of learning and adaptation to the new tool.
- Comprehensive Client Status Tracking: Enabled BAs to monitor client statuses such as approved, declined, in process, or incomplete, with emphasis on proactively engaging clients who have not completed their applications.
- Self-Registration for New BAs: Allowed any Indonesian citizen to register as a BA directly through the app, streamlining the onboarding process and expanding the agent network.
Additional improvements to data visuals
During user testing, it became apparent that the data visualization needs of BAs were distinctively different from those of other user groups due to the commission structures based on performance brackets. Therefore, we adapted the visualizations to clearly illustrate how BAs were performing relative to the thresholds for each commission bracket. This adjustment was crucial in helping BAs understand what was required to not only reach their initial commission rate but also to progress to higher commission brackets (2nd and 3rd tiers), thereby motivating them to enhance their performance.
Consumer & Merchant Tool
1. Product Data Upload
- Function: Merchants upload product details to the system using CSV files via overlay trays, minimizing navigation efforts and maximizing efficiency.
- Design Choice: The simple overlay design allows for quick entries and modifications, supporting swift updates without requiring page reloads or extensive navigation.
2. Client Input and Real-Time Updates
- Function: Merchants upload product details to the system using CSV files via overlay trays, minimizing navigation efforts and maximizing efficiency.
- Design Choice: The simple overlay design allows for quick entries and modifications, supporting swift updates without requiring page reloads or extensive navigation.
- Real-Time Decision Updates: Once the consumer submits their application, both the consumer and merchant receive real-time updates regarding the approval status directly within the app. This immediate feedback loop keeps all parties informed and enables quick follow-up actions from the merchant based on the application’s outcome.
3. Merchant App
- Consumer Application: Consumers complete their loan applications on the BFI consumer app, designed for simplicity and infrequent use. The application form layout on desktop versions utilizes vertical columns that display all sections simultaneously, reducing the need for navigation and allowing consumers to easily tab through fields.
- Merchant Overview: Merchants can monitor application statuses through a structured table (referred to as a decision board), which provides concise updates and relevant statistics to manage follow-ups effectively.
- Design Choice: The decision board’s layout is optimized for clarity, with a simple table format that includes real-time status updates and essential performance metrics, facilitating immediate actions based on application outcomes.
4. Seamless Communication and Decision Follow-up
- Function: Upon application approval, merchants are prompted to contact consumers to finalize the purchase. If an application is declined, merchants can also swiftly reach out to provide alternative solutions or assistance.
- Design Choice: Direct communication tools embedded within the platform enable merchants to maintain continuous interaction with consumers, ensuring that all parties are aligned and informed throughout the process. This system supports a proactive approach to customer service and sales completion.
End Results
The transformative digital initiatives implemented at BFI Finance have garnered significant industry recognition, demonstrating the effectiveness and impact of the project. Here are the awards received as a result of these efforts:
- Golden Trophy - The Best Multi-finance Company in Digital Brand for 3 Years in a Row (2022 - 2024): This prestigious award highlights BFI Finance’s continuous commitment to digital excellence, directly reflecting the strategic enhancements made in digital branding as part of our project. The consistent recognition over three years underscores the sustainable impact of our digital transformation strategies.
- The 2nd Best Multi-finance Company Asset Class >Rp10 Trillion: This accolade recognizes the substantial growth in BFI’s asset management, a direct result of the improved operational efficiencies and streamlined processes enabled by the digital tools developed and implemented in this project. The recognition in such a competitive category validates the effectiveness of integrating advanced digital solutions into traditional financial operations.
- The 2nd Highest Digital Index Multi-finance Company: This award is a testament to BFI Finance’s strategic application of digital technologies to enhance its market presence and operational efficiencies. The digital index improvement is a direct outcome of the new platforms and applications that were designed to make BFI’s operations more agile and responsive to market demands.
Impact on Business Growth
The digital transformation has not only elevated BFI Finance’s industry standing but has also driven substantial financial growth:
- Overall Growth: Since 2021, BFI Finance has seen a growth rate of 20.8%, significantly enhancing its market value.
- Increase in Valuation: The initiatives have added more than USD 650 million to BFI’s valuation, demonstrating the tangible benefits of integrating digital solutions into traditional finance operations.
These results reflect the strategic foresight of the digital transformation efforts, aligning technological advancements with business objectives to foster growth and industry leadership.
BFI win Digital Brand Awards 3 years running since 2021
https://www.bfi.co.id/id/award/2023
Since 2021, BFI Finance has seen a growth rate of 20.8%, significantly enhancing its market value.
https://www.idnfinancials.com/news/Since 2021, BFI Finance has seen a growth rate of 20.8%, significantly enhancing its market value.
https://www.idnfinancials.com/news/
