Bank Strategy The Indonesian banking landscape in the future will be redefined by 7 (seven) trends, namely (1) Demographic developments, (2) Changes in customer behavior, (3) Implementation of Environmental, Social and Governance (LST) based business models which have increased significantly, ( 4) Regulatory changes, (5) Continued low interest rate trends, (6) Advances in data and technology, and (7) Shifts in industry structure as a result of the emergence of digital financial service providers. In the future, Indonesian banking revenues were predicted to be driven by non-linear growth in 4 (four) segments (UMi, Micro, SME, and mass affluent group) and 3 (three) product categories (wealth banking, transaction banking, and multi-finance). On the other hand, the Covid-19 pandemic has significantly disrupted the national banking industry. The Covid-19 pandemic had become a catalyst for changes in consumer behavior, customers were increasingly accustomed to the use of digital technology. This encouraged the need for digital banking services to become increasingly higher and to merge with customer activities and lifestyles. Various policies implemented by the Government regarding controlling Covid-19 succeeded in bringing Indonesia out of the pandemic. Until finally in June 2023, the Indonesian government officially revoked the pandemic status and declared Covid-19 an endemic disease. Thus, economic recovery efforts that had been promoted since the gradual lifting of the Community Activity Restrictions policy could certainly be carried out more acceleratedly in several sectors without restrictions like during the previous pandemic. As a state-owned business entity, BRI has a role in supporting national economic resilience through banking activities provided by encouraging the acceleration of financial inclusion for the Indonesian people at large. On the other hand, BRI, also a Public Company, is required to remain a business entity to maintain the quality of its business so that it can generate profits as one of the value generators for shareholders. By accommodating these two main interests, BRI has then set its long-term plan aspirations for the 2021-2025 period to become The Most Valuable Banking Group in Southeast Asia and Champion of Financial Inclusion with the following parameters: 1. Most Valuable Banking Group in Southeast Asia (Most Valuable Banking Group in Southeast Asia), indicated by a market capitalization value of USD 75 billion. Operational Review 2. Inclusive Financial Champion, indicated by BRI’s role and contribution in helping Indonesia to achieve 90% of the financial inclusion target through expanding banking services to ~55 million unbanked population. These aspirations has been pursued through a transformation scenario entitled BRIvolution 2.0. The spirit of transformation that has been ongoing since 2018 has continued with the strengthening and sharpening of several aspects in accordance with external conditions that have experienced extreme changes. BRIvolution 2.0 represents the Company’s spirit to create a higher quality, stronger and more sustainable BRI. BRIvolution 2.0 has been implemented in 3 (three) persistent phases interconnected with each other. 2021 and 2022 became the initial phase of the journey where in this period; the Company focused on internal strengthening as a provision to scale up and scope up business coverage in 2023 and 2024, in order to maintain BRI’s leadership and market dominance in the Southeast Asia region in 2025 and so on. In the era of digitalization, the banking world experienced a deep transformation through the development of information technology. Artificial intelligence (AI), cloud computing and cyber security became the main pillars that shape the new face of the financial sector. The implementation of artificial intelligence not only improved operational efficiency, but also strengthened transaction security and enables personalization of services to customers. Meanwhile, the adoption of cloud computing technology provides flexibility and faster data access, forming a responsive and dynamic banking ecosystem. However, in this transformation journey, BRI also has responsibility for environmental, social and governance (ESG) factors. BRI increasingly realizes the importance of sustainability in banking business strategy. By integrating ESG and IT principles into the company’s strategic plan, BRI not only meets the expectations of a market that is increasingly focused on sustainability, but also creates a solid business foundation for the future. Sustainability is not just an option, but a foundation for building an independent and inclusive society. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 198
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