When traditional processes become a bottleneck, how do you ensure your HR management systems are effective in serving all your employees?

One bank in Indonesia turned this challenge into an opportunity to elevate its HR system. And it’s all with the help of artificial intelligence.

Bank Danamon Indonesia – one of the country’s leading financial institutions with over 850 branch offices – needed a new HRMS that was scalable and efficient in catering to the 8,000-strong workforce that powers the firm.

More sophisticated approach to talent management

“Managing a workforce of this size required a more sophisticated approach to talent management, one that could handle complex processes from hire to retire, employee engagement, and decision-making with greater precision and speed,” said Handri Yustanto, Digitalisation & Analytics Head, Corporate Human Resources, Bank Danamon, in an exclusive interview with People Matters.

The bank integrated SAP Business AI solutions, including the generative AI copilot Joule. This partnership marks one of the first integrations of the AI tool in Southeast Asia.

“Traditional HR processes were increasingly becoming a bottleneck, slowing down our ability to respond to dynamic business needs,” Handri said.

Multiplying the impact of tech

Like most organisations on the cusp of AI transformation, Bank Danamon aimed to “multiply the impact of technology to speed up and enhance operational efficiency, reduce bias in managing talent management, and empower our HR team to focus on more strategic initiatives”.

How is Bank Danamon successfully steering its transformation journey? Here are excerpts from our interview:

How are AI solutions, like Joule, deployed in your HR operations?

AI-driven insights are accessed through a centralised HR platform that integrates all HR processes from hire to retire, enabling our HR team to respond more effectively to the needs of our workforce while ensuring that data is securely managed.

Integrating AI within the same platform is a crucial part of our mitigation strategy, particularly because Bank Danamon operates in the financial services industry, which requires strict compliance with government regulations and robust data security measures in line with governance standards for AI usage within the company.

Ultimately, our goal of integrating AI into our HR processes and technology is to simplify routine tasks, allowing our HR team to focus on more strategic initiatives rather than administrative tasks.

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What are some of the key benefits you have observed from using AI to improve Bank Danamon’s HR and talent management; employee culture and engagement; recruitment; and employer brand?

In talent management, AI can support employee skill and career development through personalised recommendations. Additionally, AI-driven insights offer valuable summaries of compensation data, make tailored suggestions, and provide key talking points for discussions with our talent, ultimately enhancing our retention strategies.

The implementation of AI will significantly enhance employee culture and engagement by providing more effective feedback. Not only does AI deliver positive feedback, but it also makes feedback actionable by offering constructive suggestions that employees can act on immediately. Over time, this will foster the open feedback culture we believe is crucial to our company's success. A culture of open feedback and communication aligns the organisation with its workforce, drives innovation in business approaches, and improves the ability to adapt and evolve to changing needs.

Our recruitment process, especially for front liner positions, has become more efficient and targeted with AI-powered candidate matching. AI helps us sift through large volumes of applications quickly, ensuring that we identify the most suitable candidates based on a range of parameters, leading to better hiring outcomes.

As for our employer brand, the use of cutting-edge technology has positioned Bank Danamon as a forward-thinking and innovative employer in the financial sector. This makes us more attractive to top talent who are looking for a technologically advanced workplace to build future-ready skills and experience.

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What long-term goals does Bank Danamon aim to achieve through the use of AI?

Our long-term vision for integrating SAP Business AI is to create a more agile and responsive HR function that can anticipate and meet the evolving needs of our business.

Bank Danamon aims to establish ourselves as a leader in financial services institutions, with a highly engaged and productive workforce. We see AI as a crucial tool in achieving this, enabling us to create a more agile and responsive HR function that can anticipate and meet the evolving needs of our business.

We hope we can optimise our HR processes, foster a culture of innovation, and ultimately deliver superior service to our customers. We also aim to use AI insights to continually refine our talent development strategies and maintain our competitive edge in the talent marketplace.

What advice would you give to other financial institutions considering the integration of AI into their HR processes?

For financial services institutions considering AI integration in HR, my advice would be to start with a clear understanding of the specific challenges you want to address. AI should not be seen as a one-size-fits-all solution but as a tool that can be tailored to meet the unique needs of your organisation.

It's also crucial to maintain a balance between automation and human oversight, ensuring that AI enhances decision-making while preserving the human touch that is essential in HR.

Finally, invest in building the right infrastructure and skills within your HR team to maximise the benefits of AI while managing its risks effectively. Ensure you have a strong data infrastructure in place and invest in change management to prepare your workforce for the adoption of AI in their workflow.