The growth of digital technology has brought positive impact on the Small and Medium Enterprises (SME) sector in Indonesia. One of the recent breakthroughs supporting the digitalization of SMEs in Indonesia is the collaboration between VIDA and BukuWarung, utilizing digital identity verification as a solution to enhance the security and efficiency of SME business transactions. BukuWarung itself is a financial application that aids SMEs in developing their businesses and increasing income. VIDA and BukuWarung collaboration aims to enable more than 60 million Indonesian SMEs to use digital services and enhance their business operations.
BukuWarung offers solutions in various services such as sales management, invoicing, inventory management, and payments. In 2023, BukuWarung facilitated IDR 433.9 billion in financing with an average growth of 140.34% among 100 loan recipients over three months.
The rapid and substantial growth signals positive opportunities for technology innovators to further develop themselves. In the technology era, identity verification becomes a crucial key to ensuring the authenticity and security of transactions conducted by SMEs. Utilizing VIDA verification, BukuWarung has recorded over 100,000 transaction volumes per year, with an average success rate of 98% in digital identity verification. This technology not only enhances the user experience during the registration process but also mitigates conversion drops by facilitating a quick and easy process.
VIDA's identity verification technology can identify and verify the identities of business operators and transaction authenticity within minutes. Beyond cost efficiency, digital identity verification helps prevent potential fraud and deception, thereby increasing customer trust in the engaged SMEs.
In collaboration with BukuWarung, the use of digital identity verification also helps boost customer trust in business operators. The convenience provided to potential customers through identity verification has proven to reduce onboarding time by 66.6% more effectively. For business operators themselves, this technology helps reduce the potential fraud and deception in the user registration phase by 99%.
Romy Williams, VP Strategic Partnership, Compliance, and Legal at BukuWarung, emphasized the importance of VIDA's liveness detection for verifying users and SMEs. "This technology ensures that they are real individuals. It digitizes the previous method of physical verification, maintaining the highest standards for user verification to ensure safe and smooth transactions," said Romy.
VIDA and BukuWarung have brought innovation to Tier-2 and 3 business players by implementing digital identity verification. Previously, BukuWarung faced obstacles in the verification process, as face-to-face interaction with users was necessary. This process not only proves to be efficient and accurate but also reduces the risk of human errors, speeds up the verification process, and provides certainty about the authenticity of information provided by SMEs. This is done while protecting personal data with a higher level of security in compliance with regulations.
The implementation of identity verification is not limited to the registration process but extends to financial transactions between SMEs and customers. Through the BukuWarung application, SMEs can accept digital payments using QR codes or electronic transfers. Identity verification is used to ensure the match between received payment data and previously verified information.
To enhance the BukuWarung registration process, VIDA includes Optical Character Recognition (OCR) API to automate data extraction from identity cards, significantly reducing manual input errors. In addition to OCR, VIDA uses an advanced liveness API for anti-fraud measures, detecting real-time presence, thus reducing the risk of identity fraud. Lastly, BukuWarung integrates VIDA's Identity Verification service, ensuring the integrity of each transaction by comparing user details with official Identity Card (KTP).
Moreover, identity verification facilitates SME access to financial services. Sometimes, SMEs face difficulties in meeting the document requirements of traditional financial institutions. With digital identity verification, SMEs can demonstrate their authenticity and existence, easing their access to banking and financing services.
Not only that, digital identity verification can also enhance the operational efficiency of SMEs. With a fast and accurate verification process, SMEs can save time and resources previously used in manual processes. This allows SMEs to focus on business development, improve productivity, and make a positive contribution to local economic growth.
To support the digital transformation of SMEs, Indonesian government is also actively involved, providing support through various policies and programs. The government's commitment to promoting digital inclusion for SMEs includes facilitating licensing and market access. With the collaboration between VIDA and BukuWarung, emphasizing digital identity verification, Indonesian SMEs are increasingly encouraged to adopt digital technology and expand their business reach.
In conclusion, the collaboration between VIDA and BukuWarung in advancing the digitization of SMEs in Indonesia through the implementation of digital identity verification is a significant innovation. Identity verification not only increases customer trust and facilitates access to financial services but also improves the operational efficiency of SMEs. By strengthening this collaboration and adopting more sophisticated technology, SMEs in Indonesia can continue to thrive in the digital era, compete in broader markets, and make a greater contribution to the economy.