International Journal of Trend in Scientific Research and Development (IJTSRD)

Volume 4 Issue 1, December 2019 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470

The Importance of Information Technology Implementation in

Facing Industrial Revolution 4.0: Case Study of Banking Industry
Ninuk Muljani, Lena Ellitan, Jurusan Manajemen
Fakultas Bisnis Unika Widya Mandala, Surabaya, Indonesia

ABSTRACT How to cite this paper: Ninuk Muljani |

Technology has taken a big role in all aspects of human life. From the way we Lena Ellitan | Jurusan Manajemen "The
work, to the way we spend time to having fun, technology has changed Importance of Information Technology
everything including the way humans to run banking activities. The existence Implementation in Facing Industrial
of a bank has a large function around human life. Previously, banks were only Revolution 4.0: Case Study of Banking
known to those who wanted to save some of their money, now the functions Industry" Published
and activities of bank operations are increasingly diverse. The bank is now in International
accommodating the various needs of the community for financial services. Journal of Trend in
Starting from transferring funds in real time between accounts, payment and Scientific Research
receipt of salaries, payments for goods and services, to make financial and Development
investments can be done through this institution. Indonesian banks are (ijtsrd), ISSN: 2456-
demanded to develop in line with Industry 4.0, where everything has been 6470, Volume-4 | IJTSRD29557
done using IT. Banks must also improve their quality through the Issue-1, December
advancement of existing fintech. The thing that is really considered by 2019, pp.409-413, URL:
consumers is the speed and ease in conducting transactions wherever the https://www.ijtsrd.com/papers/ijtsrd29
customer is. 557.pdf

KEYWORDS: Information Technology Implementation, Industrial Revolution 4.0, Copyright © 2019 by author(s) and
Banking Industry International Journal of Trend in Scientific
Research and Development Journal. This
is an Open Access article distributed
under the terms of
the Creative
Commons Attribution
License (CC BY 4.0)
(http://creativecommons.org/licenses/by
/4.0)
INRODUCTION
Industrial Revolution 4.0. can be said as a revolution, impacts of the changes they cause. There are still a few
because the changes that occur have a major effect on the examples of the impact of Industrial Era 4.0 adaptation, for
world's ecosystems and the way of life. The 4.0 industrial example, due to e-banking factors and the rapid
revolution is even believed to be able to significantly development of payment systems, the number of job posts at
improve the economy and quality of life. Industrial each bank is predicted to disappear in the coming years. So it
Revolution 4.0 applies the concept of automation carried out is true that termination of employment (layoffs) in the
by machines without the need for human labor in its banking sector was inevitable. The enactment of e-money
application. Where it is a vital thing needed by industry provisions to pay tolls also has an impact on workers who
players for the sake of time, labor and cost efficiency. The have been serving cash payments at all toll road doors.
application of the Industrial Revolution 4.0 in factories today
Impact of Information Technology in the Banking
is also known as Smart Factory. Not only that, at this time
Industry
data retrieval or exchange can also be done on time when
The more advanced technology in the world, banking
needed, through the internet network. So that the
transactions began to use computer-based technology to
production and bookkeeping process that runs in the factory
facilitate transactions with customers. Banks that used to
can be authorized by interested parties anytime and
serve customers by having to meet / come to bank branches
anywhere as long as it is connected to the internet
provided by banks where customers save are easier because
(detiknews.com, 2019).
banks have begun to use computer-based technology and are
now able to access via the internet even with mobile
The 4.0 industrial revolution influenced various patterns of
"Mobile" with SMS. applied by banks (medandaily, 2019). In
life of the world community, including the banking industry.
the banking world, the development of information
Using technology, everything becomes easy, practical and
technology in Indonesia is strongly influenced by the ability
fast. This requires banks to continue to innovate in line with
of human resources to understand the components of
developments so as not to be left behind. Currently several
information technology, such as computer hardware and
banks have implemented a mobile banking system, money
software; network systems in the form of LAN (Local Area
cardless, can create new accounts without having to go to the
Network) or WAN (Wide Area Network) and
bank, and many new innovative features. However, not all
telecommunications systems that will be used to transfer
elements of society are aware of the logical consequences or
data.

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 International Journal of Trend in Scientific Research and Development (IJTSRD) @ www.ijtsrd.com eISSN: 2456-6470
The need for information technology-based personnel government are usually in the form of State-Owned
continues to increase, this can be seen with the many types Enterprises. In Indonesia, such banks include Bank Rakyat
of jobs that require capabilities in information technology in Indonesia (BRI), Bank Nasional Indonesia (BNI), and Bank
various fields as well as the number of capable Human Mandiri. Meanwhile, private banks were presented by
Resources in information technology is still small, when domestic and foreign business actors. Many banks provide a
compared to the population of Indonesia. This requires a variety of choices for parties who want to save or do other
national information technology framework that will realize financial activities. The bank was chosen because this
the Indonesian people are ready to face the ASEAN Free institution is considered safe and credible in maintaining and
Trade Area (AFTA) which can provide universal access to managing the money that has been deposited by its
information to the wider community fairly and equally, customers.
improve coordination and optimal utilization of information,
increase efficiency and productivity, increase the quality and Some people make banks as a place to save money. Saving
quantity of human resources, increasing the utilization of money in a bank is considered safe because it can prevent it
information technology infrastructure, including the from theft or excessive use of yourself. On the other hand,
application of laws and regulations that support it, many people expect to get interest from saving activities in
encouraging economic growth by utilizing and developing the bank. A few others have begun to realize that the
information technology. function of banks is more than just saving money. They
began to look at banks to conduct various financial
This is one of the realities of globalization of the real world transactions. From this small portion, several parties realize
economy. Integration of the national economy with regional that banks can be used as a means to make investments.
/ global economies such as AFTA, APEC, WTO / GATT is Forms of investment in banks can be done through deposit
inevitable. At present there are many economic actors, products that provide greater interest than ordinary savings.
especially in big cities that no longer use cash in payment
transactions, but have utilized modern banking services. There are also some other people who use banking services
Modern banking services that only exist in big cities are to do credit. The Bank does provide a variety of loan
understandable because of the current economic growth that products that offer convenience to the public, ranging from
is still concentrated in big cities, which causes the velocity of unsecured loans (KTA), Home Ownership Loans (KPR), to
money is also concentrated in big cities. So that the banking Vehicle Ownership Loans. These loan products are presented
sector was rather slow in its expansion into regions. with competitive interest so that people often find it helpful
because with loans from banks, they can have the goods they
This is more or less due to the present condition of need and want. The various facilities provided by this bank
infrastructure in addition to the unique and broad are inseparable from the objectives of the banking
geographical aspects of Indonesia. online information institutions listed in Act Number 10 of 1998 concerning
technology, for example, a customer can withdraw money Banking. The regulation states that the purpose of national
wherever he is as long as there is an ATM (Automatic Teller banking is to support the implementation of national
Machine) service from the bank, or a customer can check the development in order to improve equity, economic growth
balance and transfer the money to another account in just and national stability towards improving people's welfare.
minutes, all transaction can be done. In addition, another
role of Information Technology in the banking world is the The important objective of the bank is to make this financial
application of banking transactions via the internet or institution function properly. If anyone thinks that a bank is
known as Internet Banking. Some transactions that can be just an institution that looks for profit alone, surely that
done through Internet Banking include money transfers, assumption is wrong. Because from the elaboration of the
checking balances, transferring books, paying bills, and Banking Law, there are three main functions that must be
account information (Cermati.com 2015). A number of banks carried out by each bank to support national development.
in Indonesia are currently utilizing Information Tenology to
improve services to their customers. For example, customers According to the banking law banking functions include:
can take money from ATM machines that are available 24 First Collecting Community Funds: The activity to raise
hours a day. In fact, several banks have established public funds is carried out by banks by opening various
partnerships that allow customers to take money through savings products. It is expected that with these products,
ATMs of other banks that have a shared ATM logo. people are more aware of how to save money properly and
more safely. Not only ordinary savings, the bank also
The Bank Functions and the Operational Activities presents a choice of products in the form of deposits which
A financial institution called a bank is no longer a strange are considered to be able to accommodate the wishes of the
thing nowadays. The existence of a bank has a large function public who want to save their money as well as invest it. This
around human life. If in the past banks were only known to product offers a higher interest rate, but with a higher
those who wanted to save some of their money, now the deposit than ordinary savings products. Second is
functions and activities of bank operations are increasingly Distributing Funds to the Community. Funds raised from
diverse (OJK, 2018). Simply put, banks are now the public by banks certainly are not just left to settle. If only
accommodating a variety of public needs for financial left unmanaged, of course there is no such thing as interest
services. Starting from transferring funds in real time to customers. The aim of helping the implementation of
between accounts, payment and receipt of salaries, national development and equitable development also
payments for goods and services, to make financial cannot be realized. To meet these objectives, banks also
investments can be done through this institution. function as a channel of funds to the public who need
financial services from these institutions. Fund distribution
Not only owned by the government, the private parties are by banks is done by providing various credit facilities. By
now also building banking services. Banks owned by the

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 International Journal of Trend in Scientific Research and Development (IJTSRD) @ www.ijtsrd.com eISSN: 2456-6470
utilizing these facilities, the community is expected to Developing Banking Technology in Facing Industry 4.0.
improve their lives and produce efforts to support national Technology has taken a big role in all aspects of human life.
development. Third is Providing Bank Services. Realizing From the way we work, to the way we spend time having
that it is not only credit that can be an effort to realize fun, technology has changed everything, including the way
equitable national development, banks have also finally humans do their banking. With the help of banking
functioned to provide various services that make it easier for technology, bank customers now no longer need to meet
the public to conduct financial transactions. Initially, banks with tellers to deposit money, check balances, or make
provided transfer services to facilitate sending money from transfers between banks. Almost all banking activities they
one area to another to overseas. But over time, bank services can do in the palm of their hands with smartphones. In fact,
are now increasingly diverse. Bank services can now be day by day, the types of banking activities are becoming
enjoyed by people from various classes. With these services, increasingly complex, which requires the banking world to
the public is facilitated to make various payment and continue to grow. It is not impossible in the future that the
purchase transactions. For example, banks now provide number of physical banks will be reduced or completely lost,
electricity, telephone, and transportation ticket purchases. because all transactions can be done via the internet or
With these services, payment flow and also become more electronically.
clear and secure. The three functions of the bank are carried
out in a variety of supporting operational activities. To carry ATM (Automated Teller Machine) is one of the biggest
out its functional activities, there are two types of banks that findings ever in banking history. ATM revolutionized
need to be known, namely commercial banks and rural banking, which initially required customers to come and
banks (BPR). Following are various operational activities meet with tellers to withdraw money faster and easier with
carried out by banks according to the two types of financial the help of machines. Initially, ATM used a special
institutions. microcontroller with its own architecture that secures the
processed data. Now, with increasingly cheap hardware,
Commercial Bank Activities ATMs have begun to adopt the hardware architecture of PCs
The focus of the discussion in this article is regarding the (Personal Computers) and switch from microcontroller
implementation of technology in commercial banks. This technology. In Indonesia, ATMs can generally be used to
type of bank is a bank that carries out activities to raise make cash withdrawals, cash deposits, bill payments,
funds and provide financial services to the public. purchase credit, and cash transfers (fellow or interbank).
Commercial banks also carry out various activities that can While some special ATMs can print bankbooks, replenish
support payment traffic, ranging from telephone, electricity, electronic wallet balances, to withdraw money with the help
to insurance. Economically and simply, there are five of cellphones. In fact, to make it easier for customers, ATM
operational activities that can be carried out by commercial machines are now placed in locations with easy access.
banks. The following are commercial bank activities carried
out to carry out its main banking functions. Mobile Banking and Internet Banking: Smartphone users
until 2017 have reached 2.3 billion users, and it is estimated
1. Fund Raising: the main function of commercial banks is that by 2020 this figure will continue to increase to 2.9
collecting funds from the public. Efforts to carry out this billion users. This means that more than thirty percent of the
function are carried out by issuing various financial world's population uses smartphones in their daily lives. By
products to save funds, ranging from savings, current bringing banking technology closer to customers through
accounts, to deposits. mobile banking technology, customers will get easy
transactions. In addition, mobile banking also takes a role in
2. Lending: now commercial banks can distribute credit to expanding the banking network. Now customers no longer
the public. Credit or financing is given in a variety of need to bother looking for an ATM for transfer purposes. All
products, ranging from loans for home purchases to their needs are now in the grip. The presence of cellular
loans without collateral. telephones also inspired banks to conduct services called
3. Fund Transfer: This one operational activity is carried mobile banking or M-banking. By using SMS, customers can
out to provide services for equitable national already check balances or make other transactions such as
development. Transfer made by the bank is done for the paying for landlines and transferring money to other
benefit of the institution itself and for the benefit of the people's accounts.
customer. Examples of products from this operational
activity include transfers between regions or sending In addition to transaction requirements, mobile banking will
money abroad. also make it easier for customers to check balances, send
money, and even get information about banking products
4. Storage of Goods and Securities: Activities of commercial offered to them. Another banking technology is online
banks to carry out the function of services are also banking (internet banking), where all existing transactions
presented with the provision of storage places for goods are carried out through the internet with a more up-to-date
and securities that are safer than those kept at home or security system - albeit with more security holes as well.
those that are difficult to hold to account. An example is Unfortunately, not all regions in Indonesia can enjoy internet
a bank providing safety boxes aimed at people who want banking services due to uneven internet connectivity,
to secure their property in the bank. especially in remote areas. This is where mobile banking
5. Placement of Funds: Commercial banks also place takes a role with banking applications that can be accessed
customer funds to other customers in the form of via SMS or applications in the SIM toolkit (STK) that are
securities. Unlike stocks or mutual funds, securities included. Another service is internet banking. By using an
issued by banks are not listed on the stock exchange. internet connection, customers can conduct banking
activities through an internet connected computer. Internet

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banking transactions that can be done in the form of authority to issue Bank Indonesia Regulation No.16 /
checking balances, transferring money, making deposits, see 1/2014 concerning Consumer Protection for Payment
the history of transactions. There are even banks that System Services. One effort that can be done to protect
already provide online bank account opening services consumer identity is to replace old magnetic tape technology
without you having to queue at the bank. Despite all its with more sophisticated chips.
shortcomings, both mobile banking and online banking is a
technology that is crucial for banks to be able to develop As a bank that cares about the safety and comfort of their
their networks throughout the country. customers in making transactions, PermataBank is one of the
few banks that will convert their conventional debit cards
Multi-factor authentication in banking technology: In the into debit cards with chips. Their latest debit card,
past, just using your username and password was enough to PermataDebit PLUS, is expected to be a transactional
authenticate. But now, with the rise of crime in the digital solution that will allow customers to make transactions
realm, an authentication method is needed that will secure anywhere and anytime without worrying about the security
customers' banking activities, both traditionally and mobile of their data.
or online. Multi-factor authentication uses several methods
to convince the system that the customer has the right to Permata Debit PLUS, which is based on VISA, allows
access. As written in the book Cryptography and Network transactions at all merchants that receive VISA payments,
Security by WIlliam Stallings, several factors that are usually not only offline, but also online transactions. For security
used by the system to verify users include (Manuwu, 2017): support in online transactions, customers will get an OTP
(1). Something You Know: This authentication makes use of code that is used as the final verification of online
something that the user knows. The simplest example is a transactions at all merchants with the logo "Verified by
password or PIN. (2). Something You Have: This VISA". This allows PermataDebit PLUS users to transact in e-
authentication will utilize an object or item owned by the commerce, application stores such as AppStore and Google
user. These objects can be in the form of magnetic cards, NFC Play, as well as other online services such as Uber and Grab.
stickers, or other objects that have unique information in This will make it easier for customers to carry out any
them. (3). Something You Are: This authentication method transaction they want safely and comfortably. The
will involve the uniqueness of the user as one of the factors. development of banking technology does not stop here.
One example is the biometric scanner. The device scans the There are still many other developments that are definitely
user's biological factors, such as fingerprints or retina of the interesting to see. It is not impossible that there will be
eye. (4). Something You Do: This authentication factor will official banks that will only handle cryptocurrency like
ask the user to perform a series of instructions to ensure that bitcoin in their business. The way banks use technology to
the user is not a bot or computer code. bring innovations that make it easier for customers to
transact is what might pull back generation Y and millennial
Some of the factors above can be used either or used interest that was saturated with conventional banking. We
together, depending on system requirements. The more just consider the next banking transformation with the
factors that are used, the safer a system is. However, what is presence of other new technologies.
applied on the customer side is mostly just two-factor
authentication, which can be between a magnetic card with a Technology Implementation of Several Banks in
PIN such as an ATM, or a PIN with an OTP (One-Time Indonesia
Password) token such as mobile banking / online banking. The banking world in Indonesia has been said to be ready
and implement IT in its operations (Tribunbatam, 2019) One
Electronic Wallet (e-wallet): Although this technology was of them can be seen at BCA Bank. It's been a long time since
not initiated by the banking industry, e-wallet is usually Teller has begun to be replaced by a machine, using digital
associated with banking activities when using accounts to Customer Service so that customers can change cards
top up. One of the most famous examples of e-wallet is without going to customer service. And in the future you will
PayPal, which is still the most trusted solution by its users to open an account. BCA has an BCA E-Branch so that
transact online. In Indonesia, e-wallets are quite commonly customers can make a deposit slip without writing it, so
used by some people. The use of e- wallet is common in when using a transaction at the Teller directly use the code.
Indonesia, among others, as one of the payment methods in So it has started paperless and customers don't need to
physical and online stores, as payment for train and bus queue for long because there is a queue in particular. The
tickets and toll gates. In addition to making each user application of BCA M-banking supports customers to open
transaction more practical, e-wallet security is also accounts without having to come to customer service and
somewhat safer compared to debit cards and credit cards. If the availability of BCA machines that provide convenience
lost, the nominal value of the lost money is limited to what for printing savings books. The services at BCA all make it
you have deposited. Unlike a credit card, which if dropped in easier for customers so now if the customer does not bring a
the wrong hands can be drained until the card limit runs out. book, it can still be helped. The most important thing is there
Debit cards are also vulnerable to skimming, where illegal is a card and PIN ATM, also has recorded data and the data is
magnetic tape scanners can store customer data from a debit already online (Kompas, 2019). Further examples of the
card (TribunBatam., 2019). application of IT can also be seen in the system used by Bank
Danamon. Bank Danamon further strengthens digital
Debit card with chip. Lately skimming crime is quite banking services with D-Bank Registration (Danamon.co.id,
common in Indonesia. The potential for skimming is 2019). At present the D-Bank Registration application is to
everywhere, from the actions of "naughty" business owners, complete D-Bank, a comprehensive solution for Bank
to irresponsible individuals who install a scanner on an ATM Danamon's digital banking services. With the tagline
machine. This makes Bank Indonesia as the highest banking "Banking Your Way," this application is expected to provide

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convenience for customers in conducting end-to-end the public always feels dissatisfied and always wants
banking activities digitally, anytime and anywhere. With D- something new and more positive for the future.
Bank Registration, in addition to coming to the branch,
prospective customers can also open an account online with REFERENCE
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by banks through IT. Indonesian banking has indeed had to rhadap_perbankan_dan_perdagangan
enter the development of industry 4.0, because inevitably

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