Digital Transformation in Banking with TOGAF Framework: Promoting Innovative Loan Disbursement System

Background: Providing efficient loan disbursement system is an essential banking service. Indonesian customers are eager to pay higher interest rates in exchange with faster and innovative loan acquisition. For this reason, Indonesian central bank has mandated all banks to embrace digital transformation program with recent IT technology to provide innovative loan disbursement system to serve larger customers while still maintain healthy financial ratio. Objective: Although digital transformation program in banking is essential. However, many banks do not have adequate framework to assist them in transforming loan disbursement system. Having an innovative and faster loan disbursement system are key advantages for banks to survive in competition. Nowadays, the bank industry is having fierce competition from Fintechs that provide more innovative and faster loan to reach larger customers. Methods: The article takes a case study of SMS bank that serves large SMEs and is affiliated with conglomerate business. The SMS bank management has embraced digital transformation initiative with TOGAF framework to integrate their loan disbursement system with its major business partners to create innovative business ecosystem. The article applies interviews, observation and Focus Group Discussion (FGD) with major key stakeholders to examine current problems and expectations. Results: The TOGAF framework provides guidance to create innovative business ecosystem with third parties such as traditional and online retailers, post-offices, and so on that have close access to end customers. The use of TOGAF framework enables to address major hurdles in digital transformation especially related to important stakeholders such as: Population and Civil registry services (Dukcapil), Central bank and Financial Monetary Authority, Police and Immigration. Conclusion: TOGAF framework provides systematic digital transformation process in integrating business ecosystem and promoting fast loan disbursement system through optimizing API service. With flexible API service, business partners can develop innovative busines and supported by banking service.