AC Ventures, Indonesian Chamber of Commerce and Industry (KADIN), Boston Consulting Group (BCG), and BCG X have released a report titled “Harnessing the Power of (Gen) AI in Indonesian Financial Services,” which explores the adoption and impact of AI and GenAI in Indonesia’s financial sector, offering strategic advice for leaders on integrating it into their products and operations.

President-elect Prabowo Subianto targets economic growth to reach 8%. The Indonesian Chamber of Commerce and Industry (Kadin) recommends investment in the artificial intelligence (AI) sector and energy transition to achieve the target. Pandu Sjahrir, Head of the Ecnomic and Digital Finance Development, said it is necessary to attract more foreign investment to achieve the economic growth target. According to him, the most potential sectors to attract foreign investment are energy transition and artificial intelligence.

“I think, especially based on the background and Indonesia’s ambition for 8% economic growth, and that is a very good ambition, especially for the next government, because now the economy is 4.5-5%. How do we get to 8%, which is the remaining 3% that we need to fill? Everything is related to investment and investment from abroad,” Pandu said at the AC Ventures Office, Central Jakarta, Wednesday (14/8/2024).

He explained that the government should facilitate investment in the digital world and digital infrastructure development. According to him, Indonesia is a potential country that can attract foreign investment. This is because Indonesia is located in Southeast Asia with economic growth and a stable political situation.

“The big question is can we use this as an opportunity, as a place where we can attract more investment in Indonesia. That’s why the angle in terms of artificial intelligence, in terms of digital infrastructure development is one angle to be able to reach 8% again,” he explained.

Furthermore, at least Indonesia needs an investment of US$ 20 billion or Rp 313 trillion (exchange rate of Rp 15,670) to build one data center. He obtained this calculation when comparing with Malaysia.

“One data center used for AI is equal to 8-10 million megawatts. Indonesia needs a minimum in the next few years, two years, at least 2 gigawatts.Malaysia has a population of 25 million, one-twelfth of Indonesia. Their backlog today is about 1.5 gigawatts. Indonesia, with a population of 300 million. Yes, at least slightly above Malaysia’s 2 gigawatts. So, if it’s 2 gigawatts, it’s about US$ 20 billion for digital infrastructure,” he added.

Pandu added that the implementation of AI in the business world can make employees more productive. According to him, the implementation of AI will not lead to layoffs in the short term. Instead, he sees that employees can gain insight and experience in the use of technology. Based on the results of a report entitled “Hamessing the Power of Gen (AI) in Indonesian Financial Services”, 49% of businesses in the Indonesian financial sector prioritize the use of AI to improve customer service. In addition, 51% of financial institutions in Indonesia use AI for daily work.

The study—based on a survey of 41 financial institution business leaders and interviews with five fintech startups—reveals critical insights into the new technology’s effects across the industry. It provides strategic recommendations for business leaders in the private sector on how to implement it in their products and operations.

The report also includes key advice from KADIN Indonesia for the government as it transitions to a new administration and pursues the development of sovereign AI for national interests.

💡 Get the full report at: https://lnkd.in/g2a6FQN9