Bank Rakyat Indonesia (BRI), the country’s second-largest lender by assets, launched BRISat — a commercial telecommunication satellite — to connect 10,650 BRI branches across the archipelago digitally over the next few years.
The bank plans to transform itself into the biggest digital banking network in Indonesia by 2019. BRISat is the first satellite owned and operated by a bank. Traditionally, banks all over the world rent satellite services from telco companies to support their operations.
“We will develop a number of financial applications and make the most out of our new satellite to make BRI more efficient,” said Asmawi Syam, the President/Director of BRI — which specializes in providing loans for small and medium enterprises.
The $250 million satellite was launched by the world’s leading satellite launch company Arianespace from the Guiana Space Center — Europe’s Spaceport in Kourou, French Guiana. The satellite will be stationed at a geostationary orbit above Papua.
Connecting the economy across the islands
Asmawi said BRI is now more than ready to compete in digital banking against counterparts in the region, ahead of the semi-integrated financial market for ASEAN member countries — scheduled to be open by 2020.
Muliaman D. Hadad, Chairman of the Financial Services Authority, or OJK, said the satellite should benefit the whole of Indonesia’s banking sector.
BRI has around 50 million customers all over Indonesia and operates more than 9,800 conventional outlets, which include head offices, branch and sub-branch offices and SME loan outlets. It also offers more than 100,000 e-Channel outlets.
The scale of the lender’s operations means it needs network support from 23 satellite transponders. In the past, the bank’s satellite-based communication network has been relying on services from 9 satellite service providers in Indonesia.
BRI had been spending about Rp 500 billion per year to rent satellites. Buying the BRISat outright is equivalent to the cost of renting satellites for 7 years. The satellite maker promises BRI it can use BRISat for at least 17 years.
A version of this appeared in Jakarta Globe on June 20. Read the full article here.