In the current era of digitalization, the development of technology is rapidly changing, which affects many industrial sectors and aspects. One of the industries that affected is the finance and banking industry. With the development of technology, the competition between banks is getting tougher. Moreover, the presence of fintech and e-wallet are also enlivening the competition in industry. Responding to the intense competition in the banking industry, currently every bank in Indonesia is developing their own banking applications for smartphones to fulfill their customer needs. Based on the results of a survey conducted by PwC Indonesia in July 2018, as many as 86% of respondents have a mobile banking application on their smartphone.

On the other hand, from the customer side, there is also a change in behavior trends along with the development of technology. According to PwC research in June 2018, the results showed a shifting behavior from customers in terms of doing the banking activities. In 2017, most of the customers still made banking transactions using online or PC more often than using their mobile phone. But one year later, which is in 2018, there was a change in the preferences of customers in carrying out their banking transactions. Through Figure 2 below, it can be seen that there was a 5% increase in mobile users and a 5% decrease also in online or PC users. Therefore, it can be concluded that there is a shift of 5% from online or pc dominant users to mobile dominant when it comes to customers finishing their banking transactions.

Currently, Indonesian customers are also particularly open to innovative digital economy products, especially digital payments. In accordance with Bank of Indonesia data in 2022, digital payment transactions increased by Rp 56 trillion (2019), Rp 47 trillion (2018), and Rp 12 trillion during the past three years (2017). Furthermore, the  use    of  cashless  transactions also shows a significant growth. This is reflected in the increase in QRIS transactions in  December 2021  as  reported by  Bank Indonesia, which grew by 237% compared to the previous year reaching Rp 27.7 trillion.

Figure I: Smartphone-based mobile banking is leading the component of digital strategy

Figure 2: Customer channel behavior trends.

Based on the latest POJK regulation number 12 in 2021, banking industries in Indonesia are differentiated based on their owned capital, which is called “KBMI” or Kelompok Bank Berdasarkan Modal Inti. In Indonesia, there are 4 categories, namely KBMI 1, KBMI 2, KBMI 3, and KBMI 4. KBMI 1 category is a bank with total capital of up to 6 trillion Rupiah, while for KBMI 2 category banks must have capital in the range of 6-14 trillion Rupiah. Moreover, for the category of banks included in KBMI 3 should have capital of 14-70 trillion Rupiah and to be part of KBMI 4, the bank needs to have more than 70 trillion Rupiah. Currently, there are only 4 banks that are included in the KBMI 4, they are Mandiri, BRI, BNI, and BCA. According to Databoks data [1] there are 13 banks belonging to the KBMI 3 category in Indonesia and 17 banks part of KBMI 2, while KBMI 1 category has the largest number of banks, which is 73 banks classified as a bank with capital of less than 6 trillion Rupiah.

As a response to technological developments, most banks in Indonesia are competing to create mobile applications considering the needs of consumers. There are several examples of banks that develop mobile applications, such as BCA Mobile, BRI Mobile, Livin by Mandiri, BNI mobile, OCTO Mobile and many more. All of these mobile banking applications basically want to provide ease for their customers to do banking transactions.  In   line   with   the   Populix   poll   of   578 respondents in 2022, there are various reasons why customers utilize mobile  banking  apps  and the most popular explanation is because it is hassle  free,  time efficient,  and  easy to  use.  

Figure 3: Reasons of using mobile banking apps.

Figure 4: Most used mobile banking apps.

In this digital era, competition between banks in Indonesia is getting tougher, especially in the technology aspect. All of the banks are trying to accommodate the needs of their customers through developing mobile banking applications. Based on a survey conducted by Populix in 2022, BCA Mobile is the most used mobile banking application. After BCA Mobile, BRI mobile and Livin by Mandiri occupy the second and third positions with percentages of 26% and 25%, respectively. This survey was conducted on 578 respondents and 60% of them were BCA Mobile users. OCTO Mobile was in 6th position with only 5% users which indicates a lack of active users.

Furthermore, according to a survey held by the Top Brand Award in 2022, BCA Mobile Banking is also the most popular mobile banking application in Indonesia. This assessment was carried out based on a survey of 8500 respondents spread across 15 major cities in Indonesia. The top brand index score is obtained by calculating the average weight of each parameter that consist of the following aspects:

• Top of mind which is the first product brand that was mentioned by the customer during the survey

• Last usage which is the last brand product that was used by the customer

• Future intention which is the respondents desire to use the brand’s product in the future

By using this scoring system, the BCA Mobile application managed to get the highest rank with a Top Brand Index (TBI) score of 19.4%, followed by Livin by Mandiri with 12.9% and BNI Mobile with 11.2%. Meanwhile, OCTO Mobile is recorded as having the lowest TBI score on this 

Figure 5: Top brand index mobile banking 2019-2023.

Table 1: Top brand index mobile banking 2019-2023.

Figure 6: Transactions contribution through digital and electronic channels in 2018-2022

list, which is 3.8%. Based on the CIMB Niaga Annual Report in 2022, there were 5 pillars of strategy that were implemented by the company and one of the strategies was leverage of information technology, which indicates a strong indication of the company’s direction that was currently focusing on development of digital and electronic channels. In 2022, the contribution of financial transactions through digital and electronic channels reached 97.02%. OCTO Mobile application performance was exceptional in 2022 as there was a significant increase in the number of financial transactions of 56.3% compared to last year with the number of transactions reaching 176 billion. Moreover, the transaction value increased by 32.7% from the previous year with a total transaction value achieved of 191 trillion Rupiah. Therefore, with all the potential that the OCTO Mobile application has and in line with one of the company’s strategies that want to leverage the information technology, this research will focus more on the usage of OCTO Mobile application that is still lower than the other mobile banking applications.

The Perceived Value of Mobile Financial Services Applications

According to a previous study, mobile financial services (MFS) is divided into two major digital banking channels, they are mobile banking and mobile wallet or mobile payments. Mobile banking services are recognized as the most valuable and crucial m-commerce application. This downloadable mobile financial services software provides a broader range of cost-effective service alternatives as well as excellent security. Furthermore, mobile financial services apps (MFSA) have a huge potential market due to its widespread availability, ease of use and innovative banking and payment options.

To understand consumer behavior in the context of e-services [2] and mobile information systems [3], perceived value (PV) is required. Perceived value is the consumer’s overall assessment of the usefulness of the product based on the perception of what is received in exchange for what is supplied [4]. In addition, perceived value is the foundation of business activity which is essential to the company’s success because of the enormous impact it has on brand loyalty.

There are two aspects that are used in the perceived value approach, namely utilitarian and hedonic aspects [5]. In the area of mobile financial services, utilitarian value is strongly tied to the efficacy and efficiency gained by using a certain service to do any daily job [6]. On the other hand, hedonic value is seen to be non-instrumental, experiential, and effective, deriving from the joy and fun obtained from usage rather than job performance [6][3]. 

Various factors impact utilitarian or hedonistic value prior to the establishment of perceived worth. These are the components:

Personal Innovativeness (PI) is defined as the personal characteristics of risk-taking customers who explore new inventions and services [7]. It also indicates the degree to which a person adopts a new concept in comparison to a typical member of the social system [8].

Consumer judgments is an alignment between self-concept and brand image that are reflected in Self Congruence (SC) [9].  For the purpose of this study, self-concept is assumed to be actual because it represents genuine consumer impressions, even though self-concept can be actual or ideal. To sustain the perceived value of the brand while also satisfying the consumer, it is critical to develop a strong brand image and generate self and brand image congruence among current and future customers [10]. 

Perceived Risk (PR) is a perceived unfavorable outcome of purchasing a new product or services  [11]. Risk impacts consumer confidence in their intentions and behavior in the context of technological acceptance and this uncertainty intensifies when the probabilities of outcomes are unclear [12]. 

The degree to which a product is seen differently from others due to its newness and originality is referred to as new product novelty (NPN) [5]. According to the study, novelty is more connected to hedonic value appraisal than utilitarian value evaluation [5].

A research on how perceived value influences the usage of mobile financial service apps (MFSA) [13] looked at the direct impacts of personal innovativeness (PI), self congruence (SC), perceived risk (PR), new product novelty (NPN), and perceived value (PV) on perceived value as well as the effects of perceived value on overall satisfaction and commitment. The key drivers of perceived value in mobile financial services applications (MFSA) are perceived value (PV), self congruence (SC), and new product novelty (NPN). The more value a user receives through mobile financial services applications, the more highly he or she assesses his or her relationship with the bank in terms of overall satisfaction and commitment.

Segmenting Targeting, Positioning

Segmenting

Finding out what types of clients with various needs exist is what segmentation is all about. Market segmentation, according to Armstrong and Kotler [14], is the practice of grouping customers that have similar qualities into smaller groups.

Targeting

Targeting is the process of determining which segments will be served and it is possible for a company to pick more than one segment. For a company to succeed, it should focus on segments that offer the highest potential for generating customer value and ensuring long-term profitability.

Positioning

Positioning refers to the way a brand creates a unique and desirable position for a product in the minds of its target consumers, which sets it apart from similar products. It also determines how the brand is perceived in relation to others in the market.

Marketing Mix

According to Philip Kotler[14], marketing mix is a collection of manageable components that a company can utilize to affect the behavior of buyers. These manageable components are referred to as the 4Ps, which consist of Price, Place, Product, and Promotion. Following the segmentation, targeting, and positioning (STP) process, a product must be introduced to the market by applying the right combination and balance of the 4Ps to attain marketing objectives.

Product

A product is what a company provides to its customers. This comprises the product’s design, features, quality, packaging, and branding. Products are categorized according to their utility, durability, and tangibility. Products are divided into two types based on their intangibility which is physical goods and intangible goods.

Price

The price of goods and services is the amount of money exchanged for them. When determining the appropriate price, several factors should be considered, including costs, demand, competition, marketing objectives, and government regulations. Setting the price can be achieved through four methods which are cost-based pricing, competition-based pricing, demand-based pricing, and objective-based pricing. Each method is based on a different approach to pricing.

Place

Place refers to the physical location where products are made available for customers or distributed to them. The distribution process can be accomplished through various channels, including wholesalers, retailers, the internet, mail order, or direct sales.

Competitor Analysis

Competitor analysis is the process of identifying and assessing the strengths and weaknesses of competitors in a particular industry or market. According to Porter competitor analysis is a critical aspect of developing a successful business strategy because it helps a company understand the competitive landscape in which it operates. Competitor analysis involves gathering information on the strategies, capabilities, and resources of competing firms, evaluating their market positions and identifying potential threats and opportunities for the company. The analysis also helps companies determine their own competitive advantage and develop effective tactics to gain a larger share of the market.

PESTEL Framework

According to Johnson et al. , PESTEL analysis is a widely used tool for evaluating the potential impact of external factors on business operations. The analysis helps organizations identify opportunities and threats posed by the macro-environment, and adjust their strategies accordingly.

Political Factors

Political factors are one of the components of PESTEL analysis and refer to the impact of government policies, laws, and regulations on business operations. Political factors can have a significant effect on business operations, as they can create opportunities or pose threats to a business depending on the specific situation.

Economic Factors

In PESTEL analysis, economic factors are considered as a crucial component that reflects the economic conditions and trends which can impact the performance of the market or industry. Some of the economic factors that can affect business include economic growth rate, inflation rates, interest rates, exchange rates, level of employment, and consumer spending patterns.

Sociocultural Factors

Sociocultural factors refer to the cultural and social values, beliefs, and attitudes that can influence the behavior of individuals and groups in society. By understanding sociocultural factors, businesses can better meet the needs of their customers and build stronger relationships with them. Factors that may influence the business such as changes in demographics, lifestyles, attitudes towards work, health and wellness trends, education levels, and cultural norms.

Legal Factors

Legal factors associated with the rules and regulations that may affect an industry or market, including employment laws, consumer protection laws, environmental regulations, health and safety regulations, and tax policies.

Porter Five Forces Analysis

In carrying out the competition analysis, Porter's Five Forces analysis will be able to explain the overall industry structure and assist in the analysis of the strengths and weaknesses possessed in competing industries [15]. Based on the framework created by Michael Porter, there are five forces that determine potential profit of the company’s industry and mold the company’s competitive strategy. Those five forces are the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and competitive rivalry.

Threat of New Entrants

The threat of new entrants refers to the potential for new competitors to enter a market and compete with existing businesses. The more difficult it is for new businesses to enter the market, the lower the threat of new entrants is. There are several factors that will affect the threat of new entrants such as barriers to entry, economies of scale, and brand recognition.

Bargaining Power of Suppliers

Bargaining power of suppliers is one of the five forces that can affect the level of competition in an industry, which attributes to the extent to which suppliers can influence the prices and terms of the goods and services they supply to companies in the industry. The bargaining power of suppliers can be influenced by various factors, such as the concentration of suppliers, the importance of their inputs to the industry, the availability of substitutes, and the cost of switching to alternative suppliers.

Bargaining Power of Buyers

According to Porter’s Five Forces, the bargaining power of buyers indicates the ability of customers to negotiate and demand better terms and prices from the businesses they purchase from. This factor is important in determining the level of competition within a market or industry. Some factors that might affect the bargaining power of buyers include the concentration of buyers in a market, the availability of substitute products or services, the ability of buyers to switch to alternative suppliers, and the level of information available to buyers about the products and services they are purchasing.

Threat of Substitute Products

The threat of substitute products specifies the possibility that the products or services offered by the industry can be replaced by other options. Several factors affect the threat of substitutes, including the availability of alternative products or services, their  price  point,  and  their  level  of  performance.

Rivalry Among Existing Competitors

Competitive rivalry is the level of competition among existing firms in an industry or market. This factor is influenced by factors such as the number of competitors, the degree of product differentiation, the rate of industry growth, the level of advertising and promotion, and the level of customer loyalty.

SWOT & TOWS Analysis

To evaluate the particular strengths, weaknesses, opportunities and threats of the internal organization and external environment, the method that will be used is SWOT analysis. As described by Kotler and Armstrong [14], the term SWOT consists of the following:

• Strength is defined as its internal resources, ability, and any good situational elements that assist it serve its consumers.

• Weakness is the company's internal constraint, as well as negative situational circumstances affecting its performance.

• Opportunity is a factor or trend in a company's internal environment that may be used to the company's advantage.

• Threat is described as external causes or trends that might provide problems to a company.

After conducting a SWOT analysis, the results of the analysis can be used to develop a strategy using the TOWS matrix. The TOWS matrix assists in methodically identifying relationships between threats, opportunities, weaknesses, and strengths and provides a platform for developing strategies based on these relationships.

Benchmarking

Benchmarking, according to Prasnikar [16] is a technique of generating business knowledge by comparing and evaluating business information about other organizations with the purpose of improving the quality of decision making. Benchmarking may be incorporated into the strategic management process such that it becomes a component of strategic planning, regulating, and executing operations. The following are five forms of benchmarking:

• Process benchmark: The benchmarking process compares operations, work methods, or business processes.

• Product benchmark: A product benchmark compares two or more products or services.

• Strategic benchmark: A strategic benchmark is a comparison of organizational structures, management practices, and company strategy.

Figure 7: Conceptual Framework

• Internal benchmark: Internal benchmarking compares products or services from similar business divisions inside the same corporation.

• Competitive benchmark: A competitive benchmark measures performance in comparison to a direct rival. Products, services, technology, research and development, personnel policies, and more may all be investigated.

Conceptual Framework

The objective of the conceptual framework is to determine the underlying reason for the problem statement, which is crucial in developing a business strategy. This research will use primary and secondary data to examine the current state of OCTO Mobile, the company's mobile banking application. An internal environmental analysis will be conducted to investigate the segmentation, targeting, and positioning of OCTO Mobile. Furthermore, the marketing mix approach will be employed to establish the products, place, promotion, and price of OCTO Mobile. The external environment of the company will be examined through the use of PESTEL analysis and Porter's Five Forces analysis. This will provide an understanding of the various factors in the industry that could potentially impact the company's performance and its mobile banking application, OCTO Mobile. PESTEL analysis will consider the political, economic, sociocultural, technological, environmental, and legal factors that could influence the company, while Porter's Five Forces analysis will analyze the competitive forces in the industry that could impact the company's profitability and competitiveness.

Moreover, the writer will also examine the competitors through competitor analysis by using benchmarking. On the customer side, this research will conduct the customer analysis that will help the writer to understand the company’s target market, the needs and preferences of the customer. After all of the business analysis parts complete, the next step is to use SWOT analysis to obtain the summary of business analysis afterwards. By conducting SWOT analysis, it will help the writer to find out the root cause analysis and determine the most suitable strategic development for the business issue.

Research Design

This study aims to address several business issues by utilizing a quantitative method approach. The research will analyze the marketing effectiveness of the OCTO Mobile application, identify customer behavior, and evaluate the perceived value of OCTO Mobile application. As previously stated, the quantitative component will involve the collection of data through questionnaires and the use of purposive sampling techniques to determine the target sample based on specific characteristics of the population and the objectives of the research.

Data Collection Method

Primary Data

Primary data refers to information that is gathered directly from questionnaires. In this study, questionnaires were used to collect primary data from sources that met the criteria. The questionnaires were distributed to a specific group of respondents, selected using non-probability sampling through the purposive sampling technique. This approach involves selecting participants based on specific considerations and criteria. To gain insight into consumer behavior, the research focuses on customers who have used OCTO Mobile applications. These individuals comprise the population under study.

Secondary Data

In order to get more accurate data, this study will also use additional secondary data that will be fulfilled through various resources including books, journals, articles, news, and the internet. Moreover, to support this study, the OCTO Mobile app ratings data from Apple Appstore and Google Playstore will be sorted based on the most favorable and relevance.

Data Analysis Method

Based on the data that will be collected, the quantitative research method will use descriptive statistical analysis since it is more practical and be able to provide an overview of the object being researched through sample or population data as a requirement to fulfill the MBA degree.

Segmenting, Targeting, Positioning

Segmenting: Segmentation is one of the important processes for businesses to separate their consumer base into distinct groups or segments based on numerous characteristics, preferences, and habits. Before CIMB Niaga designed a marketing strategy, CIMB Niaga mapped out their market segments first. Based on information obtained from Mix Marcom Magazine's exclusive interview with Toni Darusman as CIMB Niaga's Head of Marketing, Brand and Customer Experience explained that based on segments, CIMB Niaga divided into four segments. The four segments consist of youth (young generation), young family, business, and sharia.

Targeting

The process of determining which segmentation will be served by a company is called targeting. In determining the target consumers, it is possible for a company to choose more than one segment. “Our target market is those who need fast, convenient and on-the-go digital solutions. In terms of age, users are evenly distributed with an age concentration of 22 to 50 years.” said Toni Darusman about CIMB Niaga’s customer targeting [17].

Positioning

In a sector with comparable goods, such as banking, a company should have a strategic positioning that highlights the distinctions from rivals and a favorable placement of the company’s brand in the eyes of customers. OCTO Mobile is a product that exploits its brand identity which already identifies the distinction from rivals since it is immediately related. OCTO Mobile application is well positioned for CIMB Niaga as a digital channel and a supplementary service for customers who want to conduct banking transactions at any time and anywhere. Moreover, OCTO Mobile app is an super app that offers banking and investments, which quite comprenhensive.

Marketing Mix 

In this section, the marketing mix will be discussed in broad outline which will later be discussed in more detail in the survey results discussion section.

Product

Like the other banks in general, products from CIMB Niaga are included in the intangible product category because what is offered to the customers is in the form of services, including the OCTO Mobile app. There are various services offered by OCTO Mobile, starting from opening an account, paying bills, making investment placements, and many more. All of OCTO Mobile services are provided to CIMB Niaga’s individual customers.

Place

Location is a place where customers can find products or services offered by a company. Location plays an important role because it determines the distribution that can be reached by consumers. OCTO Mobile app distributes through digital marketplaces, namely Google Playstore, Apple AppStore and Huawei AppGallery. Thus, customers can easily download OCTO Mobile because it is available on various digital application platforms.

Promotion

To harness this trend effectively, the establishment of new branches in strategically selected locations can be considered. By expanding its physical presence, the restaurant can cater to a broader customer base and tap into the growing demand for in-person dining experiences. Moreover, creating an inviting and comfortable ambiance within each restaurant location is crucial. This can significantly contribute to customer retention and loyalty, as patrons are increasingly seeking not only delectable dishes but also a pleasant and memorable dining atmosphere.

Price

There is a price that must be exchanged by a customer in order for them to get their desired goods or services. In this case, OCTO Mobile application is a free application that does not charge any subscription fee. The same thing is also done by other bank competitors who have mobile applications since most of them applied the competition-based pricing.

Competitor Analysis 

In this modern era, the banking and financial industry grow rapidly from year to year. Every player in the industry continues to strive to innovate in order to dominate the existing market share in Indonesia and to survive in the midst of intense competition. Currently, fintech mobile payment and other mobile banking products are competing head to head with OCTO Mobile application.

Mobile Payment

Mobile payment analysis will cover its history, present market state, and market penetration. All of them have an impact on OCTO Mobile’s low utilization. T-Cash which belongs to a provider called Telkomsel was the first pioneer mobile payment in Indonesia back in 2007, followed by Indosat and XL Axiata. In 2008, Indosat decided to launch Dompetku, while XL developed XL Tunai in 2012. The mobile payment services, which were based on USSD (unstructured supplementary service data) technology, were primarily utilized for telecom top ups, utility bill payment and remittance services. It can be seen that the first initiatives in the field of mobile applications did not come from banks, but from the smartphone service provider industry. Then starting in 2012, the presence of mobile payments in Indonesia was increasingly diverse, where the banking industry and application developers began to provide this payment service.

Mobile Banking Products

In terms of mobile banking products, according to the results of a survey conducted before by Top Brand

Figure *: Indonesia digital payment trends 1st semester of 2022.  (Source: Jakpat Survey Report 2022)

Awards in 2022, there are 3 mobile banking applications that are most often used by consumers. In the first place, which has the highest users among the others is M-BCA, while in the second and third place are BRI Mobile and Livin by Mandiri. Therefore, the competitor analysis will be more focused on the top 3 applications used by the customers. The strength and weakness for each mobile banking application will be evaluated based on ratings and reviews in the Google Play Store  and  Apple  App  Store.

PESTEL Analysis 

Political Factors

As part of the efforts made by the government to promote the non-cash national movement, the government through Bank Indonesia launched the Quick Response Code Indonesian Standard or known as QRIS on August 17th,  2019. With the QRIS payment system, it is hoped that it can support national economic recovery, develop MSME growth, and accelerate finance in an inclusive manner. On the other hand, to accommodate the use of QRIS, it indirectly forces banks to have a mobile banking application. QRIS brings benefits to both customers and banks. For customers, QRIS will make it easier for them to make transactions, while for banks the existence of QRIS helps them to be more cost effective because banks can eliminate the need for investing in physical payment infrastructure, such as Point-of-Sales (POS). Moreover, QRIS also enables banks to offer payment services to a larger range of customers, including those who may not have access to regular banking services or credit cards. This inclusiveness facilitates banks to tap into new market sectors, promote financial inclusion, and broaden their customers database.

Economic Factors

One of the external factors that influence the company's strategy is the economic factor of a country. The following is an explanation of several economic aspects.

Economic Growth

The growth rate of a country's economy is a measure of the change in the quantity of goods and services produced. Despite the ongoing global economic crisis, the Indonesian economy remains resilient and has a bright future. According to Bank Indonesia, the forecast shows positive national economic growth in Indonesia within the range 4.5%-5.3% in 2023. The positive projection of economic growth will continue and is predicted to reach 4.7%-5.5% in 2024. This is supported by private consumption, investment, and positive export performance against the backdrop of global economic deceleration. In accordance with statistical data from Badan Pusat Statistik (BPS), Indonesia's economic growth in Q1 2023 managed to show 5.03% on an annual basis and this is an expansion from the previous results in Q4 2022 which strengthened by 5.01% year on year. Overall, Indonesia's robust and developing economy provides a favorable climate for the banking sector to prosper. With positive economic growth, it will indirectly increase people's spending, both consumption and production. This provides an opportunity for banks because not all customers spend using cash, therefore bank should be able to capture this opportunity to maximize their income.

Exchange Rates

Quoting CNBC Indonesia, the government estimates that the rupiah exchange rate will weaken in semester 2 of 2023 or much higher than the assumed position set by the State Budget, which is IDR 14,800.00. In semester 1 of 2023, the average rupiah exchange rate against the US dollar is at a nominal value of IDR 15,071, while in semester 2 it is expected to weaken in the range of IDR 14,950-15,400. The weakening of the exchange rate is the impact of the global situation with a higher risk of uncertainty. Finally, the exchange rate has significant implications for Indonesia's financial industry. To guarantee stability and profitability in a volatile foreign currency market, banks must be attentive in managing exchange rate risk, providing suitable hedging options to their clients, and adjusting their operations to changing economic conditions.

Interest Rates

The interest rate from Bank Indonesia has quite a crucial impact on every bank in Indonesia. This will indirectly affect the customer's decision whether they will save their money or not at the bank. Based on the information provided by Bank Indonesia, the government agreed to hold the BI 7-day reverse repo rate at 5.75% in April 2023. This decision was taken by the government aligned with the country’s economic strategy, which aims to ensure minimized inflation expectations and inflation in the future by being consistent with the central bank’s proactive and forward-looking monetary policy approach.

Inflation Rates

During the past few years, Indonesian inflation has appeared to be constant and manageable. According to Bank Indonesia, the inflation decreased to 4.97% year on year in the reporting period from 5.47% year on year in February 2023. The most recent inflation rate is part of the contribution from Bank Indonesia’s monetary policy response, as well as close collaboration to manage inflation between Bank Indonesia, the central and regional governments, and other strategic partners in the National and Regional Inflation Control Teams (TPIP and TPID) and the National Movement for Food Inflation Control (GNPIP). Furthermore, Bank Indonesia expects core inflation to remain in the 3.0% rate with ±1% tolerance target range in the first semester of 2023, with CPI inflation returning to the 3.0% ±1% in September 2023 as the base effect of last year’s subsidized fuel price adjustments fades. Thus, it can be concluded that the inflation rate can indirectly affect the performance of a bank and this of course will  also  have  an  impact  on  mobile  banking  users. 

Figure 9: Indonesia internet users 2022

(Source: Indonesia Digital Data Report 2022)

Figure 10: Indonesia internet users towards online financial services 2022.

(Source: Indonesia Digital Data Report 2022)

Level of Employment

According to a report from the Indonesia Statistics (BPS), in February 2023 the number of unemployed people in Indonesia reached 7.9 million, a decrease of 410 thousand people compared to February last year. Besides that, the unemployment rate also managed to fall to 5.45% in February 2023. In comparison with last year, the number of unemployed reached 5.86%. The decline in the unemployment rate was due to economic growth which also had a positive impact. Hence, it will increase the opportunities for banks to grab more customers since the more people who have jobs, it means the more people who have income.

Sociocultural Factors

Companies need to closely monitor sociocultural aspects because they are dynamic. Changes that occur in sociocultural aspects can have both positive and negative impacts on the company. In Indonesia, one of the sociocultural aspects that has changed is the behavior of Indonesian people in using the internet. This will certainly have a significant impact on the industry, especially banking. In this digitalization era, the internet plays a significant role towards every aspect in people’s life. Quoting data obtained from Indonesia Digital Report 2022 by We Are Social in February 2022, there were 204.7 million internet users out of the 277.7 million total population in Indonesia. This means that 73.7% of the total population in Indonesia has been exposed to the internet and the majority of internet users in Indonesia access the internet via their mobile phones by 94.1%.

On the other hand, the report also shows a small percentage of 28.8% of Indonesians who use the internet for banking, investment, or insurance websites or mobile app purposes per month. The number of percentage is a relatively small considering that as of December 2022 the number of accounts in Indonesia has reached 508,546,341 accounts where the growth has reached 31.6% year-on-year, which is the highest growth in the last 4 years (Lembaga Penjamin Simpanan, 2022). 

It can be concluded that the high penetration of internet users in Indonesia is an opportunity for banks to develop their digital channels, especially for mobile applications. This is because most Indonesian people use the internet via mobile phones. In addition, due to the low number of internet users using the mobile banking app, this also indirectly provides a probability for every bank, including CIMB Niaga, to increase market share by penetrating the market in order to boost their product usage on OCTO Mobile as their mobile app.

Technological Factors

Along with the times, technology has an important role in most businesses. With the existence of technology, it can help many aspects of business that can be applied, from simplifying processes to creating new products. Moreover, the existence of the internet and smartphones as a result of technological developments also has a significant impact on most industries, especially banking and finance.  This is evidenced by the tight competition between banks in creating mobile banking applications. According to a PwC survey conducted in 2018, 86% of respondents stated that smartphone-based application mobile banking will be the major figure of digital banking strategy in Indonesia, followed by internet banking (68%), and ATM (48%). Apart from that, this is also supported based on the results of the Indonesia Internet Users Survey in 2022, which states that 94.1% of Indonesia’s population access the internet via their mobile phone. From the technological aspect, it can be concluded that there is actually an opportunity for banks to maximize their mobile banking applications. When the number of smartphone subscribers exceeds the number of banking accounts, the potential becomes more feasible. Furthermore, if more consumers subscribe to smartphones, it means there are more potential users for the OCTO Mobile app, because smartphone-based mobile banking is the primary component of digital strategy.

Legal Factors

As part of the highly regulated industry, legal aspects have a significant impact on banks. Currently, the banking industry in Indonesia is regulated in decree number 10 of 1998 as a revision from the previous regulation which is decree number 7 of 1992. In the digitalization era, legislators and governments also emphasize the need for laws and regulations to guarantee that no illegal actions take place. Thus, the regulations governing information and electronic transactions were issued in decree number 11 of 2008 to accommodate the use of technology and information that has revolutionized economics, social behavior, and civilization to the point that the world is now borderless. This rule benefited the banking sector by allowing banks to create products that conform with the decree and provide legal certainty while doing electronic channel commerce. On the other hand, the regulation also provides customers with confidence while utilizing mobile banking, such as OCTO Mobile app.

PORTER’S FIVE FORCES MODEL ANALYSIS 

Threat of New Entrants

The banking business in Indonesia has very strong entry barriers that leads to limiting the possibility of new competitors. These obstacles include tight regulatory requirements, significant amount of cash needs, and a relatively saturated market with numerous well-established banks already operating. Based on the latest regulations from the OJK, a bank is required to have a minimum capital of six trillion Rupiah which is included in KBMI 1, but in order to establish a digital channel, the bank needs to be categorized as minimum KBMI 2 where the required capital ranges from 6-14 trillion Rupiah. Furthermore, the existing banks that have benefited from economies of scale, high brand recognition, and long-standing client ties, making it more difficult for new entrants to compete successfully. Therefore, the threat of new entrant is low due to those factors that hinder the new players to enter and compete effectively in the Indonesian banking market.

Bargaining Power of Suppliers

Companies will have high bargaining power of suppliers if the company has a significant impact on switching costs when experiencing changes in suppliers and limited substitution of products and services offered by these suppliers. Meanwhile, there are a lot of suppliers who can supply the needs of banks in making the digital banking infrastructure which makes the bargaining power of suppliers become low.

Bargaining Power of Buyers

When there are a few large buyers in the market and each buyer purchases such a huge amount compared to the size of a single seller, then the buyer power will be high. However, in this case, the banking industry is not dominated by a few large buyers only since they offer a similar range of products and services which are available in the mass market. Moreover, technological developments have also caused banks to enter the digital banking industry where bank products can now be accessed easily through the internet and phone. Most of them provide mobile banking services that are available in Apple Store and Google Play Store which drive the power of buyers in the digital banking industry become high since the switching cost is low for consumers. 

Threat of Substitute Products

In today’s digital era, competition in all industries is getting tougher, including the banking industry. In the banking industry, the threats do not only come from competitors between banks, but also from financial technology (fintech), whose presence also indirectly poses a threat. The main threat from fintech at this time is the ability of payment through mobile phones. In addition, the number of users has also increased significantly through aggressive market penetration in the past few years. It can be concluded that the threat of substitutes from banks is high considering that fintech penetration can jeopardize several aspects, starting from the number of bank account owners, the use of debit cards from the bank,  until  the  penetration  of  credit  cards  from  banks.

Rivalry Among Existing Competitors

The banking industry has a high level of competitive competition and it varies according to the size of each bank. In the first quarter of 2023, according to the latest data published by BPS Indonesia shows 5.03% year-on-year national economic growth which is slightly increase from 5.01% year-on-year in the previous period. Since the economic growth has shown some incremental percentage, banks are vigorously battling for market share across all categories and products, including the digital channel. Considering that the goods and services offered by each bank are more or less the same, this certainly makes substitution between one and another bank easier. Thus, it creates an increase in rivalry among opponents. Furthermore, the rivalry among existing competitors will automatically create high exit barriers in the banking industry. As a part of a highly regulated business like banking, regulators’ policies establish high exit barriers, such that if a bank underperforms and declares bankruptcy, the regulator would rigorously oversee the protracted process of liquidation until all stakeholders’ rights are met. Therefore, the rivalry among competitors can be classified as high due to the large number of competitors in the Indonesian banking industry where most of the opponents are roughly in the same size, products and services are direct substitutes, and high exit barriers.

Table 2: Summary of Porter’s five forces.

Table 3:  Product variables statement results.

Table 4:  Place variables statement results.

Table 5:  Promotion variables statement results.

Table 6:  Summary marketing mix variables statement results.

As a result of Porter's Five Forces analysis, there are two forces classified as low and the other three are classified as strong. Thus, it can be concluded that the attractiveness industry is no longer attractive. This is due to the high aspect of rivalry among competitors which indicates tight competition and can be categorized as a "red ocean". Moreover, the threat of substitute products is also high which makes this industry even less attractive.

The following table shows the marketing mix performance score based on a survey of 114 respondents.

Product Performance 

In terms of product performance, there are 3 aspects classified as the advantages of OCTO Mobile so that the score obtained exceeds the average. First, most of the respondents agree that OCTO Mobile has a lot of features. Compared to other statements regarding the product, the score which describes the OCTO Mobile app has a lot of features is the highest. Second, respondents agree that OCTO Mobile has a very attractive display design and third, OCTO Mobile is a product that is easy to use. There is one statement from the product that gets a score below the average and at the same time the lowest compared to the others, this is related to reliability where sometimes users have problems when using OCTO Mobile. Thus, it means that respondents still have doubts about the reliability of OCTO Mobile, meanwhile reliability is also one of the fundamental performances of an application in this digitalization era.

Place Performance

The overall performance of the place in the marketing mix is more or less on par with the average total score. Even though OCTO Mobile is an app that does not have any physical place, this actually makes it an advantage for users because it can be accessed from anywhere. The survey results also show that OCTO Mobile users are also willing to give positive ratings and good reviews on the Google Play store or Apple Appstore. This is supported because customers  can  easily  register  and  activate  OCTO  Mobile.

Promotion Performance

Most of the users are unable to find OCTO Mobile promotion in mass media, magazines, television, and radio broadcast which leads to lowest score for promotion in terms of marketing mix performance. In addition, customers also rarely find promotional materials for OCTO Mobile on social media such as the internet or various other e-channel distributions, even though in this digitalization era, social media and the internet play significant roles in promoting a product or service. This is very unfortunate since according to the highest score given by the customer on the promotion aspect, they admit that the OCTO Mobile app actually has interesting promotional materials. Apart from that, various promotions in the form of purchase discounts or reward points are also offered by the OCTO Mobile app and customers are quite satisfied with these so that they also get a higher than average score. Thus, it is reasonable to infer that promotional materials will be one of the primary focus in future product strategy development.

The table shows that the average performance of the marketing mix is 3.979. As stated in the Table IV.8, the product performance is above the standard and receives the highest score based on standard value. In terms of place, the score obtained is 3,973 which is still on par with the average score for marketing mix, while the score below the average with the number 3,878 is promotion. 

Table 7: Personal innovativeness variables statement results.

Table 8: Self congruence variables statement results.

Table 9: Perceived risk variables statement results.

Table 10: New product novelty statement results.

Therefore, the result shows that OCTO Mobile lacks promotion even though the product can be categorized as an excellent product in a good market.

Personal Innovativeness

According to the survey, most of the OCTO Mobile users are willing to try mobile banking application or similar financial services. In addition, they also would love to try if there is a new mobile app related to financial services. Therefore, it can be concluded that the actual character of OCTO Mobile users is risk-taking customers who are willing to explore the new inventions or services and quite adaptable to new things.

Self Congruence

In line with the results, the OCTO Mobile users are able to recognize people around them who prefer to use the mobile banking services compared to the other bank services. Moreover, they also assume that people with the same character as them will definitely use mobile banking applications or similar services.

Perceived Risk

The majority of OCTO Mobile users agree that in using the mobile banking application, the security aspect of 

transactions is their main concern based on the results from the respondents. Moreover, the OCTO Mobile users are not afraid when using the mobile banking application because they are not afraid won’t get the benefits that they need. In summary, in terms of perceived risk, the OCTO Mobile users have no trust issue about the security of mobile banking applications or the other similar e-channel services. As the implication, OCTO Mobile must be more careful and need to makesure there is no leaked data and most importantly the customer funds in order to maintain the customer privacy and trust.

New Product Novelty

Based on the findings, OCTO Mobile users admit that one of CIMB Niaga’s new breakthroughs is the OCTO Mobile application. This is because most of the respondents agree that OCTO Mobile has many unique features and there are several features that cannot be found in other mobile banking applications. Thus, it can be concluded that in OCTO Mobile users point of view, the app is seen differently from others due to its newness and originality.

The elements of Perceived Value (PV) provide a foundation for comprehending the actions of OCTO Mobile users. Based on the survey results with respondents, it can be concluded that the New Product Novelty (NPN) aspect gets the highest score which is 3,872 compared to other variables in the Perceived Value aspect. 

Besides New Product Novelty (NPN), the Self Congruence (SC) variable also scores quite high which reach 3,683. Evidenced by the score of Self Congruence (SC) which ranks second highest compared to the others. 

Table 11: Summary perceived value variables statement results.

Table 12: Utilitarian value statement results.

Table 13: Hedonic value statement results.

Table 14: Overall satisfaction statement results.

Table 15: Commitment statement results.

With these results, it indirectly indicates that CIMB Niaga has succeeded in maintaining the Perceived Value of its brand as well as satisfying their existing customers, since in building a strong brand image, Perceived Value is very important. Some consumers also feel that the people around them tend to use mobile banking compared to other bank services. Thus, the OCTO Mobile application has a considerable opportunity to be able to attract the attention of non-users, especially OCTO Mobile that has been equipped by unique features that are also not available in the other mobile banking apps which further strengthen the  opportunities   for   the    OCTO    Mobile   application.

The response from OCTO Mobile users to Personal Innovativeness (PI) which scores 3,600 is also good although the numbers are not as high as the New Product Novelty (NPN) and Self Congruence (SC) variables. The results of the respondents indicate that currently users of OCTO Mobile are eager to explore new financial related applications and anticipate enhanced value from the new app that they try. The positive correlation between Personal Innovativeness (PI) and strong performance contributes to the Perceived Value (PV) of the product, as evidenced in the outcomes section related to Perceived Value (PV).

In contrast to other factors, Perceived Risk (PR) receives the lowest score which is 3,457 below the average rating. Despite this, a majority of users agree that the security of transactions is their significant concern when using a mobile banking application. However, with the existing mobile banking application, most of the users already believe in its security so that customers no longer feel afraid when using the app.

Based on the performance score, the utilitarian value with total average score 3,934 surpasses the hedonic value which is only 3,895. Most of the users agree that OCTO Mobile app is very helpful and functional. In terms of hedonic value, consumers are concerned with aspects of comfort. If utilitarian value is elevated, customer overall satisfaction is projected to be higher because utilitarian value predicts better overall satisfaction whereas hedonic value has a bigger influence on commitment.

In conclusion, the results of overall satisfaction are greater than the commitment aspect with scores of 3,960 and 3,945 respectively. Nevertheless, the high overall satisfaction score also causes a high level of commitment shown by the OCTO Mobile users. With the features and services available on the OCTO Mobile application, users feel very satisfied. On the other  hand,  respondents  also indicate that the satisfaction level with OCTO Mobile does not surpass the other mobile banking applications. Moreover, OCTO Mobile users also care about the success of OCTO Mobile products in the long run. To maintain the overall satisfaction and also improve the performance, OCTO Mobile could consider utilizing benchmarks from established mobile apps recognized for their performance, or explore applications endorsed by third-party entities through Top Brand Index (TBI) rankings.

4.6. SWOT Analysis

Based on the preceding business analysis, the SWOT analysis of the OCTO Mobile application will be as follows:

Strength 

• Product availability through mobile App Store such as Google Play Store, Apple Store, and Huawei App Gallery which is practical and easy to access. 

• Based on the survey result, the user’s commitment and loyalty are influenced by the perceived value of the product.

Figure 6: Fishbone analysis.

Weakness

• Lack of promotion activity

• Product reliability and features

• Overall satisfaction with the product does not surpass the competitor’s product offering.

Opportunity

• Government support through the introduction of QRIS (Quick Response Code Indonesian Standard) in collaboration with Bank Indonesia as a measure to advance the non-cash national movement and encourage digital transactions. 

• The Indonesian economy maintains a positive outlook and demonstrates resilience even amid global economic crises. 

• Significant portion of the Indonesian population has internet exposure and access the internet using their mobile phone, even though only a small percentage of the citizens use the internet for banking, investment, or insurance websites or mobile app purposes. 

• Smartphone based application mobile banking will be the major figure of digital banking strategy in Indonesia. 

• Assurance in terms of legal achieved through regulation that oversee information and electronic transactions. 

Threat

• Fintech mobile payment and other mobile banking products are competing head to head with OCTO Mobile.

• Mobile banking from other competitors, improved in features and reliability.

4.7. Root Cause Analysis

Root cause analysis is a problem-solving approach that involves investigating the elements that have been discovered. It is generated from SWOT analysis and is the result of internal strengths and weaknesses, competitors or external environment. The majority of the main problems arise from internal corporate shortcomings. The following diagram will show the overall image of OCTO Mobile’s lowusage compared to the other mobile banking applications.

Following the examination of the OCTO Mobile application business in the previous section, this section will focus more on identifying the underlying reasons for the business challenges through root cause analysis. The subsequent step involves presenting a strategic development plan to address these issues effectively. Corresponding to the business issue that has been defined, there are five factors that contribute to the low usage of OCTO Mobile banking application which will be discussed as follows.

Threat from Fintech Mobile Payment and Other Mobile Banking Products

With its current position, OCTO Mobile as one of the old players competing in the mobile banking industry is not included in the top brands, Therefore, to be able to compete with competitors, OCTO Mobile needs to do benchmarking other mobile banking apps that have a better rating than OCTO Mobile and included in the top 3 brand categories, namely BCA, BRI and Mandiri. Benchmarking can be carried out by OCTO Mobile to minimize its shortcomings in order to prepare OCTO Mobile from competitors’ threats. There are 2 aspects of deficiencies that need to be improved from OCTO Mobile, they are promotional activities and product aspects. In terms of promotions, compared to other mobile banking, the promotional activities carried out by OCTO Mobile are quite lacking. On the other hand, in terms of product aspect, OCTO Mobile needs to focus in product’s reliability since the overall satisfaction with the product does not surpass the competitor’s product offering. As stated in the competitor analysis section, the three brands included in the top brands will be analyzed using comparative analysis. The results of a comparative investigation of leading brands’ mobile banking will be included into OCTO Mobile features which will add greater value to OCTO Mobile application.

As part of digitalization, the existence of fintech mobile payment has become a threat to bank businesses, especially in the digital aspect considering that the services offered by both are the same. When compared to the traditional approach of creating a bank saving account, mobile payment is more flexible since it simply takes an email address and a phone number to register an account before it can be used as a mobile wallet or used for payment. The increase of mobile payment users in the market also reflects customer convenience with flexibility, as well as a warning to the banking industry that in this digital era, customers have more options to complete their financial transaction needs. Aside from their flexibility, fintech’s mobile payments are also promoting themselves aggresively compared to mobile banking from banks. Customers are drawn to utilize mobile payment applications since they offer enormous amounts of promotions such as discounts and cash back given by various tenants and ride hailing providers. Moreover, most of the fintech promote their product through social media which have a great coverage and low cost. Thus, subconsciously these conditions change the customer behavior because the banking sector is unable to deal with mobile payment relentless campaigns. The best method to cope with rapid market penetration of mobile payments is to apply the same strategy used to deal with other mobile banking rivals, in which the firm strives to minimize its weaknesses in order to prevent threats. In conclusion, by eliminating the product weakness with adding more capabilities that can facilitate mobile payment features is the most suitable option for OCTO Mobile application.

Product Reliability and Features

According to the respondents, the OCTO Mobile application’s user profile primarily consists of individuals who prioritize transaction security, with product reliability and features serving as crucial factors in driving increased usage. To minimize the weaknesses of OCTO Mobile in order to increase the chance of usage rate, the TOWS method is the most applicable in finding the solution. It is possible to reduce the reliability of product flaws by continuously updating the security system of OCTO Mobile, which is currently also done periodically. This information should also be communicated to customers to make them feel safe and comfortable when making transactions through OCTO Mobile application. Moreover, promotional effort is also required to promote this activity as a campaign of product high reliability. In addition, OCTO Mobile also has to add and update several features by utilizing benchmarking against competitor’s products. Those additional features should answer the issue from the prior section regarding the threats and weaknesses. By applying those efforts that have been described, it is expected that the usage rate of OCTO Mobile applications will increase.

Lack of Promotion Activity

In terms of internal environment, another factor that causes low usage of the OCTO Mobile application is due to the lack of promotional activity since most of the OCTO Mobile users are unable to find OCTO Mobile promotion in mass media, magazines, television, and radio broadcast. Moreover, in terms of digital presence, OCTO Mobile is also not easy to find such as in social media or various other e-channel distributions. Therefore, to maximize the promotion activity of OCTO Mobile it is important to define the marketing activities based on the segregation which divided into Above the Line (ATL), Below the Line (BTL), and Through the Line (TTL). In this case, TTL promotion will be more suitable since it will emphasize more on the product conversion rate over the establishment of brand equity. This is due to the survey result that shows low promotion is the weakest aspect in the marketing mix. 360o promotion and digital marketing campaign are some of the TTL examples that might work for OCTO Mobile application. In order to achieve a greater conversion utilization rate, OCTO Mobile must increase the product brand recognition through some promotional activities.

Overall Satisfaction with the Product does not Surpass the Competitor’s Product Offering

The measurement of overall product satisfaction shows a strong correlation with competitor products. The survey result indicates the importance of adopting a strategic approach to enhance the product development which mirroring the same approach when addressing competitive threats from the rival products. In this context, it is proven that improving and refining OCTO Mobile application product offerings will not only boost customer satisfaction but also strengthen the product's competitive position in the market by aligning OCTO Mobile product development strategies with the challenges posed by competitors' products. Through incorporating enhancements and supplement features inspired from benchmarking our competitors’ products will significantly boost the conversion of usage rate.

Mobile Banking from Other Competitors Improved in Features and Reliability

In the dynamic landscape of mobile banking, competitors have been relentless in their efforts to enhance the features and strengthen the reliability of their offerings. This unwavering commitment to perfection has resulted in a dramatic change of consumers’ mobile banking experiences. Most consumers now can access all of their banking transactions from their fingertips which bring simplicity and efficiency for them. Various services from mobile banking are offered, where users now enjoy a wealth of innovative features, such as intuitive mobile interfaces, real-time transaction tracking, enhanced security protocols, and seamless integration with other financial services. With all of these new improvements have not only raised the bar for user expectations but have also built a sense of trust and confidence in the reliability of mobile banking solutions. As the competition continues to drive innovation, consumers look forward to even more sophisticated and dependable mobile banking experiences in the future. Therefore, in order to beat what the other competitors are offering, OCTO Mobile should be able to accommodate the features in the top 3 most used applications which can be done by benchmarking. Apart from that, it would be even better if OCTO Mobile could also provide features or services that are not available in the top 3 applications.

In conclusion, the following table is the summary of root

cause factors and proposed solutions for each root cause.

Table 16: Root cause mapping summary.

By considering various factors from internal weaknesses, external environment, customer analysis, and competitor analysis, it can be concluded that the primary underlying issues affecting the OCTO Mobile application low usage rate are insufficient promotional activities and lack of product reliability and features.

The strategy development plan for OCTO Mobile application will be divided into two parts based on the root cause analysis, they are product development and proposed marketing activities.

Solution 1: Product Development

The product development of OCTO Mobile application should address product and marketing mix indications that perform below expectations based on the survey results, which is reliability and features. Furthermore, product development should be able to accommodate brand equity enhancement through increased brand loyalty. Thus, to maximize the product development, there are several strategies that can be implemented which consist of benchmarking process, key performance development, and features linked to mobile payments.

Benchmarking Process

The benchmarking procedure follows the competition analysis in the previous segment of this study. According to the analysis result, there are several significant aspects of mobile banking that are shown by top brand mobile banking in Indonesia which turn out to be quite crucial elements for consumers. Some of these elements are explained as follows:

• Easy to use

• Reliable

• Multiple features

• User friendly interface 

• Fingerprint login 

• Opening saving account through online

Key Performance Development

According to the survey results, OCTO Mobile provides many features and is helpful, as noted in the top mobile banking several important performance reviews. In general, all the features offered by OCTO Mobile are quite adequate and competitive with competitors. However, there are several inputs from consumers that OCTO Mobile might want to consider in terms of features. Based on survey results from respondents, most consumers want an e-money top up feature, lower the minimum amount for purchasing bonds and expand the coverage of PDAM payments which not only cover big cities but also small cities. Overall, most consumers are satisfied with the features offered, but most of them experience problems with OCTO Mobile in terms of the speed of the application, which is sometimes slow and unreliable. Therefore, OCTO Mobile should immediately improve the application performance, especially in the latest version of OCTO Mobile which has just been launched. For continued development, OCTO Mobile should engage with more institutions and corporate agreements to provide financial services and add other features in order for consumers to gain more benefit from using OCTO Mobile app. 

One of the considerations for customers in terms of choosing mobile applications is based on the user interface. The addition of a user-friendly and fascinating user interface to a mobile application product increases its worth. BRI mobile and Livin by Mandiri are considered as having an excellent user interface among top brand mobile banking in Indonesia. Thus, it is better for OCTO Mobile to use the same user interface that is close to those two apps since it has been proven based on consumers preferences. 

The next important feature that is also important for consumers based on the results of the benchmarking process is fingerprint login. Currently, fingerprint login and even biometric login features are available on the OCTO Mobile application. With the availability of these two features, it will automatically increase the security of OCTO Mobile app users which will ensure that the application will not be misused, especially when undesirable things happen, such as the consumer's cell phone being lost or stolen. Since OCTO Mobile app already has the features that competitors offer and even provides more than what competitors have, therefore OCTO Mobile app just need to ensure that these features can run well in the application in order to increase the reliability in consumers point of view. 

Features Linked to Mobile Payments

The current version of OCTO Mobile app accommodates most of the top up features for both mobile payments and e-wallets which cover the majority of users such as OVO, Gopay, DANA, ShopeePay, and a lot of more. However, there is one feature that was previously provided on OCTO Mobile but is no longer available, which is the e-Money top up feature. Hence, in order to accommodate all of these top mobile payment solutions it is recommended that the OCTO Mobile app bring back the top up option for e-Money in its latest update.

Solution 2: Proposed Marketing Mix

Building brand equity through brand awareness and focusing on product conversion should motivate OCTO Mobile app to perform more advertising since sales promotion is no longer effective when customers are not exposed. The corporation uses social media platforms such as Instagram to promote OCTO Mobile application sales, however according to the survey results, the effectiveness of this promotional activity is questionable. There are some strategies offered to enhance low promotion activity using the Above the Line, Below the Line, and Through the Line methodologies:

Mass media communication

The company needs to launch an extensive advertising campaign in mainstream media channels like newspapers, television, and magazines by utilizing public figures who can be linked with the OCTO Mobile application. These efforts aim to simultaneously boost brand recognition and brand affiliation. This campaign has previously proven successful during the recent OCTO Mobile app launch, which in the marketing campaign video featured CIMB Niaga’s brand ambassadors Sandra Dewi, Cut Mini, and Maudy Ayunda.

Utilizing Influencer Marketing

Endorsing social media influencers has become a prevalent practice nowadays. By spending advertising expenses lower than those incurred on mass media, the return on investment remains nearly equivalent or even better. The primary objective of these endorsements is to cultivate brand recognition for the OCTO Mobile app within the scope of social media. According to one of the articles called “When less is more: the impact of macro and micro social media influencers’ disclosure” by Samantha Kay, Rory Mulcahy, and Joy Parkinson which examined the impact of social media influencers on customer behavior and understanding of the products or services that are being sold. The article investigates whether micro or macro influencers have a greater impact on viewers or audiences. Hence, the findings indicate that the consumers exposed to the content of micro influencers possess a significantly greater comprehension of product knowledge in contrast to individuals exposed to macro influencers. 

Currently, CIMB Niaga has 3 ambassadors targeting several different segments, those three ambassadors are Maudy Ayunda, Cut Mini, and Sandra Dewi. According to the pictures below of each CIMB Niaga’s brand ambassador’s Instagram account, three of them have a huge number of followers, indicating that they are all “macro influencers”. 

Although it can be established that CIMB Niaga would be exposed to many of them through a celebrity influencer with a large number of followers, according to the research data above, the efficacy of conveying product knowledge is poor. Given that the product is digital, a requirement for influencers could be their expertise in mobile financial services applications. This criteria ensures that influencers not only increase their follower count but also possess the knowledge to effectively educate the product’s workings and its most up-to-date features. 

Another thing to keep in mind is that if CIMB Niaga decides to collaborate with influencers, the influencer must represent the value that CIMB Niaga promotes. The risk of selecting an influencer with a bad reputation can only be damaging to CIMB Niaga’s image. Apart from selecting the correct influencer, it would be safer for CIMB Niaga to select numerous influencers rather than just one. 

Social Media Marketing

Social media platforms offer several tools for marketing, such as sponsored ads on Instagram, Facebook, Tiktok, and Youtube, as well as on high traffic website domains. Aside from promotional activities, another advantage of utilizing social media is the ability to establish brand equity in the virtual world. With shifting consumer behavior, social media may be the most efficient area to position an advertisement. 

Currently, CIMB Niaga has a program called CIMB Niaga Warrior which has been part of Kejar Mimpi marketing campaign since 2019. This program gives a chance for CIMB Niaga employees and customers to be influencers by sharing CIMB Niaga’s principles and activities on their social media profiles, especially through Tiktok and Instagram platforms. CIMB Niaga Warrior would be an excellent program for raising awareness for new and potential users through the influence of a few well picked “warriors” as the micro-influencers. Since the initiative has been there for several years, it is important for CIMB Niaga to leverage the existing program. As part of the company’s marketing strategy, the chosen “warriors” will be responsible to deliver the marketing contents from the company’s marketing communication division. CIMB Niaga has differentiated the social media content between brand ambassadors and “warriors”, which the brand ambassadors will be more specific in the scope of the products capturing a larger scope, while the “warriors” is more specific and based on their own experience. The primary distinction is that official brand ambassadors represent CIMB Niaga as a whole, whilst "warriors" might play lesser but more effective roles on their individual social media accounts.

By implementing this marketing program, it automatically gives benefits for both sides, as CIMB Niaga and the “warriors” are given incentives to perform well as “warriors”. The CIMB Niaga “warriors” would be compensated based on their performance on each post in their social media, as well as how successfully they reach and drive engagement with their audience. These techniques of advertising would be a more cost-effective approach of raising brand recognition on a smaller scale. CIMB Niaga can also consider applying this marketing strategy not only on Tiktok and Instagram platform, but also expanding to other social media channels such as Facebook to cover larger audience customers.

The digital age’s fast technical breakthroughs are having an influence on a variety of industries, including finance and banking. This has increased rivalry among banks, with the emergence of fintech and e-wallet services boosting the industry’s competitiveness even more. To answer this problem, banks in Indonesia are aggressively developing smartphone banking apps to fulfill their customer needs. In parallel with technological advancements, customer behavior has also evolved which indicates there is a shift in customer preferences for conducting banking activities. Currently, Indonesian customers are also particularly open to innovative digital economy products, especially digital payments. 

CIMB Niaga as one of the largest banks in Indonesia with a total capital of 30 trillion rupiah taking advantage of the opportunities that exist in the market in terms of developing smartphone banking applications through OCTO Mobile. However, compared to the other banking apps, OCTO Mobile has a lower usage rate. Therefore, in order to know the root cause of the low usage rate and develop the most suitable strategy for OCTO Mobile to increase the number of users, the author conducted this research.

There are several factors that cause the low usage rate of OCTO Mobile compared to other mobile banking applications. First, there is a threat from fintech mobile payments and other mobile banking products. Second, in terms of product reliability and features, OCTO Mobile still has shortcomings compared to other competitors. Third, the lack of promotional activity from OCTO Mobile. Fourth, the overall satisfaction with the OCTO Mobile product does not surpass the competitor’s product offering and the last one, mobile banking from other competitors improved in features and reliability which also threatening the OCTO Mobile position in the market, especially in competing in the mobile banking application industry.

Based on the factors causing the low usage of OCTO Mobile, there are several solutions that can be implemented, including:

• To minimize the threat from fintech mobile payment and other mobile banking products, OCTO Mobile app need to accommodate the mobile wallet/payment solutions by adding some features in OCTO Mobile application. 

• In order to overcome the shortcomings from product reliability and features in OCTO Mobile app, CIMB Niaga needs to upgrade the current version of OCTO Mobile application features. By doing this, OCTO Mobile app might increase the number of users since the product is equipped with the latest features. 

• Based on the findings, the low promotion activity from OCTO Mobile app contributes to the low usage. Therefore, it is important to do massive marketing activities to promote the OCTO Mobile app. The promotion method will be done through mass media communication, utilizing influencer marketing, and social media advertising.

• Since OCTO Mobile app does not surpass the competitor’s product offering and some of the mobile banking apps from other competitors have shown enhancements in features and reliability, OCTO Mobile app needs to adapt competitors features through product benchmarking. OCTO Mobile might want to do benchmarking from the top 3 brands which is BCA, BRI, and Mandiri. OCTO Mobile can absorb the good things and features that are available in those three applications, while complement with features that currently unavailable.

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