Jerry Ng has had a long and accomplished career spanning more than three decades. The Founder and Chairman of Bank Jago has worked diligently in a professional life shaped by vital leadership positions: guiding Indonesia’s financial system restructuring following the Asian financial crisis as government task force Deputy Chairman, founding institutions that have helped disadvantaged Indonesians to rise out of poverty, and spearheading digitally transformative enterprises that have revolutionized the region’s banking industry.
Recounting the details and insights gained from his many instructive experiences during a special Oct. 15 installment of the McIntire School’s Centennial Speaker Series, Ng videoconferenced with Commerce Professor Trey Maxham for an engaging, candid conversation. The McIntire Global Advisory Board member, longstanding Comm School class guest expert, and parent of Josh Ng (A&S ’14, M.S. in Commerce ’15) discussed pertinent subjects ranging from financial inclusion and banking access to fintech innovation as well as its many effects on regional and global business.
Rapid Change in Southeast Asia
Speaking with Maxham and fielding questions from members of the global McIntire community, Ng began by responding to the question of why digital transformation in Indonesia and across Southeast Asia is taking hold and accelerating at such a rapid pace.
Illustrating the dynamic nature of the region, Ng pointed to its more than 600 million people and, mirroring digital transformation’s ascent, a concurrent rise of the middle class, represented by a new crop of consumers with disposable income.
Ng called it “a perfect storm” facilitating quick digital growth, citing other important reasons for these incredible changes. He also highlighted the continued development of consumer behavior benefiting those who have become readily adapted to using mobile devices to accomplish daily errands or consume entertainment, as well as the prevalent emergence of startups and homegrown “decacorns” (privately held startups valued at over $10 billion) like multiservice tech company GoTo, a Bank Jago partner.
Government efforts to align policies and an overall willingness to adjust regulations are also fueling growth Ng said. But that’s not all that’s behind it: He contended that an abundance of capital has made the region’s jump to digital “supercharged,” with an influx of $6 billion funding ventures of variously sized Southeast Asian enterprises during the third quarter of 2021 alone.
For his part as the leader of Bank Jago, Ng said he sees his digitally native organization focused first on Indonesia, the world’s fourth most populous country, which holds the globe’s 10th largest economy—predicted to be seventh largest by 2030 according McKinsey & Company. With designs to take the bank’s digital services to neighboring countries, Ng shared that he feels that digital innovation has made the market ready, no longer constrained by physical borders, but expressed caution: “We have to take it one step at a time.”
Though taking a measured approach, he maintains a business location in Singapore that allows his company to attract talent from anywhere in the world, while technology has provided for increased market reach. “Borders are no longer relevant because I can open an account across the border,” Ng said, admitting that while recent innovations have made for a very exciting era, some thoughtful regulation to maintain the complex balance will be necessary to keep potential issues under control from more opportunistic players.
An App-Driven Epiphany
Tech wasn’t always at the forefront of the businesses that Ng has helped lead; he has held senior leadership roles with more traditionally focused banking entities Citibank, Bank Central Asia, Bank Danamon, and Astra Financial Services.
He recalled that in April 2008, while he was President Director with Bank Tabungan Pensiunan Nasional Tbk PT, the company purchased the majority share of a small bank called BTPN. They were out to prove a theory that they could build a profitable, mass market-focused bank serving those who were “underbanked” or out of the banking system and ignored by the big banks. In the subsequent 18 months, they more than quadrupled the number of branches from fewer than 300 to over 1,200, adding about 10,000 employees to staff the brick-and-mortar banks in the process.
Despite the success BTPN had achieved by 2014, the costs of running the traditional banks proved unmanageable.
Though Ng had already accumulated a great deal of experience in the industry, it took getting into an Uber for the first time seven years ago to eventually lead him to explore digital banking, shaping the most recent period of his professional life.
A trustee for the Blum Center for Developing Economies at UC Berkeley, where his daughter Mandy is an alumna, Ng described a memorable interaction at the conclusion of an October 2014 board meeting, when a colleague asked where he was parked. When Ng replied that he was planning to catch a cab, he was asked to hang on while his fellow board member produced his iPhone and pulled up Uber. It was the first time Ng had seen the ride-hailing app.
Within minutes, a limousine pulled over to take him to his hotel. The next 25 minutes in the Uber ushered in an epiphany for Ng. “I considered that an a-ha moment, because it dawned on me that our lives are being digitalized at a very fast pace—whether we like it or not,” he said. “And then I asked myself a very simple question: If banking is part of life, why should banking be spared? So that was the first insight to me that we ought to look at different ways of doing banking. If we can actually reorganize the way ride hailing has been done, why can’t we do the same for banking?”
His thought was the impetus for him to get behind digital banking, and in 2017, Jenius, a digital bank extension created within BTPN, was launched.
It would be a successful gamble. And though Ng would stay on as President Director and CEO of BTPN until February 2019 and grow the bank’s assets more than 10-fold during his 10 years at the helm, other challenges awaited.
“After learning from the experience, and making a lot of mistakes, I thought there was the opportunity to build a digitally native bank,” he said, hinting at the next step that led to his current company, Bank Jago.
Ng and his colleagues spent years examining digital banks across the world, and decided that partnering with established ecosystems offered the best avenue for scaling up fast. As a result, Bank Jago has partnered with ecosystems to acquire customers and absorb those costs associated with acquisition.
Their largest partner, GoTo, is wide ranging, with connections in ride hailing, food delivery, e-commerce, and much more. Ng pointed out that with GoTo’s payment services boasting active users in the tens of millions, Bank Jago can connect the bank to its digital wallets to build a strong value proposition. Additionally, insights gleaned from consumer use across services can provide important data as well.
Raising Standards through Tech
Technology and data have more to offer than increasing customer engagement. Ng emphasized that many organizations are generating positive impact through practical uses of data, benefiting many of those who are “underbanked.”
For instance, within Indonesia, he said, the use of technology and data has been making inroads to reach and empower the half of the country’s adult population—about 90 to 100 million adults—who are not part of the banking system.
Yet Ng insisted that for-profit organizations need to balance the profitable side of the business with good intentions if they are to remain sustainable: “I’m a firm believer that—first of all—you’ve got to be able to build a business case. But on top of it, you can do a lot of good,” he said.
He added that using tech can dramatically lower the costs for companies to scale up digitally, pointing to a subsidiary within BTPN that was designed to empower underserved women. He noted that because it was serving a large customer base and not relying on tech, it was labor intensive, and the cost to meet customers’ needs was very high.
Turning to discuss a group of his colleagues who formed a fintech startup that had an idea similar to his of building a digital mass-market ecosystem, Ng explained that they were able to scale up quickly through tech within one year and at much lower costs than traditional means. The result ultimately benefited the users.
But what the reliance on user data has purposefully changed is credit assessment and access to credit. Ng said the landscape has changed greatly from even five years ago, when banks had to evaluate a borrower’s credit worthiness based solely on whatever data a user provided through a particular portal. The systems in place and those requesting loans were not very sophisticated, and they were often left to sharing minimal information around income.
“But today, the borrowers are willing to let the institutions access a lot of data,” Ng said, explaining how Bank Jago is able to measure more about the lifestyles of the same users who are engaging with other aspects of the ecosystem beyond banking, giving a fuller picture. Ng believes that the resulting change will allow those people who were unable to access credit in the past to be better served, as banks are in a much better position make assessments. “I think it’s a big deal. Today, it cannot be 100% online, but over time, technology will actually make a big difference.”
Ng should know, having been a difference-maker himself across his more than 35 years as a banking leader. When Maxham asked about how his leadership style has evolved over the course of his career, Ng replied with a laugh that he doesn’t see much of a change.
Ng believes that age-old business fundamentals remain critical in the new digital economy, such as the ability to think strategically and to find and recruit good talent. As a pacesetter in this ever-changing landscape shaped by tech and innovation, Ng stressed that two strengths have helped him through: self-awareness and humility.
“For someone like me, who is not a very tech-savvy guy, I have a very high sense of self-awareness,” he said. “I always remind myself that there are a lot of things out there that I don’t know. Things that were my strengths before may no longer be relevant, so I have to be ready to unlearn and re-learn new things. And with this comes with a lot of humility.”
He noted that the sweeping changes impacting his career and those his companies serve are nothing short of amazing. Two years earlier, the focus was on digital wallets, while today, digital banks and alternative lending have come to the fore, with crypto assets and wealth management platforms making waves in recent months.
“There are a lot of things going on. I just have to tell myself to continue to learn, because otherwise, we’ll become obsolete. For digital leaders? Self-awareness and humility are important, particularly for those of my age group, because we have a lot to learn,” Ng said.
While some executives and founders have popularized the idea of being motivated by a “grand vision,” promoting a kind of confidence about what the immediate and distant future may bring, he modestly insisted he never conceived of any such ideas himself that were responsible for his success. With the wide-ranging impact he’s made in Indonesia and Southeast Asia, many may argue this point with him.
The conception of his own professional accomplishments mirrors the advice he told his son Josh: “Sometimes you don’t need a grand vision. It’s really a series of good ideas,” which Ng says led to achievement through hard work and a bit of luck.