Transformation in the digital era: Innovations for easier access to financial service

Abstract

Background: The rapid advancement of digital technology has driven transformation within Indonesia’s financial sector, including Pegadaian, which provides financial access for low- to middle-income communities and MSMEs. Conventional services face limitations in accessibility, operational efficiency, and increased competition with fintech, making digitalization essential to enhance financial inclusion and maintain relevance in the digital era. This study analyzes Pegadaian’s digital transformation through service innovations such as Pegadaian Digital Service (PDS), identifies factors influencing the accessibility of digital financial services, and evaluates its impact on financial inclusion, including opportunities and challenges. Methods: A qualitative approach was employed using library research, drawing on secondary data from scientific articles, Pegadaian annual reports, government regulations, and credible news sources. Content analysis was conducted through data reduction, data presentation, and conclusion drawing, supported by theoretical and source triangulation to ensure validity. Findings: Pegadaian’s digital transformation through PDS and Pegadaian Syariah Digital has enhanced transaction efficiency, expanded service reach, reduced geographical barriers, and encouraged interest in digital gold investment and digital financial service adoption. Integration of Pegadaian into the BRI Group has strengthened financial inclusion and operational efficiency, although challenges remain, such as uneven digital literacy, infrastructure limitations, cybersecurity risks, and the need for improved application performance. Conclusion: Pegadaian’s digital transformation has improved service quality and financial access, particularly for younger generations and MSME players. However, technology optimization, customer education, and reinforced security systems are needed to ensure the sustainability of competitive and inclusive digital services. Novelty/Originality of this article: This study provides a multidimensional analysis of Pegadaian’s transformation from the perspectives of digital innovation, user trust and perceived risk, integration within the ultra-micro financial ecosystem, and its contribution to enhancing financial inclusion, areas that have not been extensively examined in a holistic manner in prior research.