Inclusive banking

Financial technology (fintech) can be expensive and inaccessible to those at the bottom of the financial ladder, especially in Asia, where it’s largely viewed as a luxury bringing nonessential, incremental benefits.

But the President Director and CEO of Bank Amar Indonesia (Amar Bank), Vishal Tulsian, has been reframing this picture and changing the traditional rules in a bid to make fintech and banking inclusive and ultimately life-changing for the underserved.

Tulsian realized the power of fintech to uplift lives through working an living in different parts of the world. After growing up in India, he worked in Estonia for 10 years before moving to Singapore and Indonesia with Tolaram.

It was in Indonesia that he identified a gap between those with money who were already served by big banks and those without money and with no access to financial services.

“In the western world, when there is a technological advancement or innovation, then it brings in an incremental improvement in the lives of the people who already have the majority of their basic needs met,” Tulsian says.

“Whereas in the eastern part of the world, technology does not play the same role because there are more people who are not financially included, and their lives actually can be significantly impacted. And that became our underlying philosophy, that technology must impact lives, must improve lives.”

Financial inclusion

This driving force led Tulsian to found Indonesia’s first and only fully regulated digital lending start-up, Tunaiku, in 2014, which was based on three pillars of financial inclusion: having a bank account, access to credit and microinsurance.

Access to credit was identified as the most immediate gap. Tunaiku used alternative data sources such as mobile phone usage and transaction patterns to assess and extend credit to individuals without traditional credit scores. This approach was revolutionary in a region where many were excluded from formal financial services due to lack of documentation.

However, the success of Tunaiku laid the groundwork for an even more ambitious venture: acquiring a bank. While the digital lending model was working well, it relied on a cooperative or non-bank financial institution license, which was more onerous and subject to stringent regulations. Tulsian knew that banking licenses were more sustainable and best for the long-term, and so in 2015, Bank Amar Indonesia (formerly Bank Amin) was born – a digital-first bank that could offer a wider range of financial services to the underserved population.

And it has had huge success ever since, despite inheriting a small balance sheet size of US$7 million. Today, it is the first digital bank in Indonesia to be in profit, having achieved 25-fold growth in five years. It has also announced dividends – a rare feat in the fintech space.

The bank’s philosophy of using technology to build profitable, inclusive financial products has set it apart.

“Lending should not be the only criteria to look at. It should always be balanced with profit, which means, are you lending profitably instead of looking at only growth?” Tulsian says.

“And that has been one of the differentiating factors for Amar Bank as a digital bank among all the digital banks in the country.”

Tech boost

Tulsian has also harnessed technology in boosting growth over the past decade, with advancements in big data analytics, machine learning and cloud computing that have allowed Amar Bank to scale its operations with greater efficiency.

For example, the reduced cost of cloud services has enabled the bank to build robust models without the hefty infrastructure costs that once hampered fintech companies in South-East Asia.

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“Working with Bank Amar Indonesia is a transformative experience. Its commitment to innovation and collaboration fosters a dynamic environment where ideas thrive. Our team’s dedication to excellence and its customer-centric approach makes every challenge an opportunity for growth. We are proud to be part of this journey.

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Moreover, innovations such as automation, AI and application processing interfaces are playing a crucial role in streamlining operations and improving customer experiences. This has all lowered the cost of lending while still providing essential credit to those who needed it most.

“Technology has huge potential in terms of financial inclusion and reducing the cost of transactions even further,” Tulsian says.

Organizational culture

But perhaps one of the most competitive advantages of Amar Bank is its organizational culture.

“The way you create a competitive advantage in this world is by being able to think like a bank and act like a fintech, which means you can think slow but act fast,” Tulsian states.

Further, the bank takes a customer-centric approach, where every team member – from the leadership to the frontline staff – engages directly with customers to shape product development and where decisions are made based on data and customer feedback rather than top-down mandates from executives.

“Because of this mindset and culture, we have created unique processes for each and every full process of lending or in the digital banking; the whole process is designed in a way that has nothing to do with the way that things have been done previously,” he says.

As Amar Bank continues to grow and innovate, its focus on operational excellence, customer-centricity and sustainable growth, continues to drive financial inclusion in Indonesia and position it as a leader in the region’s evolving fintech landscape.