Globally, advances in technology, data, and internet connectivity are rapidly reshaping the way we deliver financial services. Financial service providers (FSPs), particularly those serving women-led micro and small enterprises (MSEs) facing the highest barriers to access, know they need to digitize to keep pace with this shift. Indonesia’s digital economy, one of the fastest growing in the world, is projected to quadruple in size and reach $360 billion by 2030, underscoring both the scale of opportunity and urgency for providers to adapt.
But digital transformation is far more than a simple tech upgrade and doesn’t happen overnight. It demands significant investment, strategic leadership and alignment, and rigorous change management to deliver tangible, commercial benefits. Yet, for many high-touch FSPs, the challenge is not whether to digitalize, but where to focus. With a growing array of digital tools and solutions, it is often unclear which investments will deliver the greatest impact and commercial returns. This lack of clarity risks consuming significant time and capital for limited payoff. What’s more, poorly prioritized or implemented digital initiatives risk deepening digital exclusion.
At Accion, our work digitalizing operating models, channels infrastructure, and customer engagement with our partners, based on clearly defined and prioritized business objectives, is helping strengthen the business case for digital transformation across financial institutions globally, while simultaneously building the financial resilience of microentrepreneurs, especially women.
In 2024, the Accion Digital Transformation Fund announced an investment in Amartha, Indonesia’s largest P2P lending platform serving over 1.9 million active women-led ultra microbusinesses, a segment that dominates the small business sector yet has significant unmet financial needs. Accion Advisory, with support from Mastercard Center for Inclusive Growth, also worked with Amartha to support the institution’s journey to digitize its group lending operations and diversify product offerings.
Anchored in a multi-year growth and scale plan, Amartha recognized that sustaining momentum would require a transformation of its operating model, revenue streams, and cost structure. This meant a substantial investment in digital infrastructure and change management, reshaping the roles and capabilities of loan officers, and strengthening risk management and underwriting processes. Amartha’s leadership evaluated opportunities against a clear set of business criteria: customer expansion, operational productivity, and revenue diversification. Digital initiatives were then prioritized using a framework that assessed expected commercial impact, operational feasibility, and ability to deliver near-term efficiency gains.
Taking this approach ensured resources remained concentrated on projects that delivered measurable business and customer value — such as faster renewal processes, lower servicing costs, and higher field officer productivity — while also creating the digital rails needed to support longer-term product diversification. Competing priorities that risked diverting critical resources and attention away from near-term business goals, such as complex feature builds or adjacent business opportunities outside the core lending model that would have stretched technical and operational capacity, were deliberately deprioritized.
By combining traditional and alternative data, digital channels such as a customer app, e-wallet, and agent network, and offline/online customer support modalities, Amartha modernized its operating model, generating substantial efficiencies and reducing customer acquisition and service costs. Where appropriate, manual, high-touch processes — such as in-person home and field visits, manual verification, or eligibility checks — were streamlined with automation powered by machine learning for credit scoring, while digital channels have reduced friction in onboarding and payments.
The results are already demonstrating measurable commercial impact. Within eight months, more than 275,000 women-led MSEs have received the new digital lending product, and over 900,000 customers — nearly 50 percent of their active customer base — are making digital repayments monthly. Field officers can now serve customers up to 50 percent faster. Branches using fully digital processes have already seen a 23 percent increase in caseload productivity. With digital repayments at least 21 percent cheaper than cash, this is significantly improving unit economics while enhancing security.
These operational efficiencies have enabled field officers to nearly double the time spent on new sales. While initially only rolled out to a subset of the customer base, the product has already increased monthly disbursements by nearly 10 percent across the overall portfolio, and Amartha aims to triple this growth by 2027.
Olip, Amartha’s field manager, told me, “With the new digital product and e-wallet, my field team can go home two hours earlier each day because we don’t have to do cash reconciliation at the branch. We’re also no longer worried about thefts or break-ins, and the time saved in collecting cash can be used to train our customers on how to use new and better products, like digital savings.”
Efficiency gains have cut time spent in group meetings in half, creating opportunities for field staff to train customers on digital usage best practices. The digital channels infrastructure has enabled Amartha to more seamlessly launch other offerings, like payments, digital savings, and microinsurance, boosting customer lifetime value and improving MSE financial resilience.
For the women entrepreneurs we surveyed who often juggle informal income streams, multiple household obligations, and cash-flow volatility, faster and more convenient access to financial services is invaluable. Sixty percent of customers surveyed reported saving time through the new digital processes, and 67 percent used that time to increase business activities and income. Many of these MSEs have taken advantage of the opportunity to become sales agents themselves, starting new revenue-generating side hustles without distracting from other business and household responsibilities.
However, the story of digitalization is not all positive. Convenience alone doesn’t erase or downplay concerns around trust and security. In fact, our research reveals that even the most digitally active customers often feel vulnerable when using digital financial services. These insights mirror findings in research from the Center for Financial Inclusion and reinforce the broader messaging that trust in technology is as important as the technology itself.
To mitigate cyber-related risks, Amartha has invested in a multi-layered, end-to-end fraud-prevention system, reinforced training programs, and provides continuous support to customers via field officers.
Contrary to concerns, digitalization hasn’t weakened customer connection; if anything, it has deepened it by giving field officers more capacity for personalized support, reinforcing the need for providers to prioritize security, fraud prevention, and change management.
Amartha’s transformation, and that of many financial institutions globally, can be a strategic mechanism for growth and scalable impact that requires enormous investment in organizational and operational change. It’s not about going “fully digital” overnight or replacing essential human touch with technology. For FSPs questioning whether to digitalize, the real focus should be how to do it well and where to stay focused to derive value for both the customers and the institution.
Our experience has shown us that prioritizing well and investing in the right technology, data, and skillsets — combined with responsible design and implementation — can help strengthen an institution’s bottom line while building financially inclusive and resilient communities.
