Tuesday, October 7, 2014

ASEAN Market is Still Open Wide

Application of the ASEAN Economic Community (MEA) or the ASEAN Economic Community (AEC) is in front of the eyes. Trade flows of goods and services, investment, and labor among ASEAN countries, will be more rapid late ASEAN free market, in 2015 this thing will have an impact on the various sectors of the economy in Indonesia while creating opportunities for many local corporations to increase the share of markets in the ASEAN region.

Government aims to make Indonesia as a trading center in Southeast Asia. Section of Indonesia with over 245 million population is the largest market in ASEAN. Asian Development Bank (ADB) noted, in 2012, of a total population of ASEAN 614.94 million, 39.96% are in Indonesia. Not just a market, Indonesia would also like to play an active role in the MEA. "We want to be its central ASEAN Indonesia," said Bayu Krisnamurthi, Vice Minister of Commerce, told reporters last July.

ASEAN countries are one important trading partner for Indonesia, other East Asian countries, such as sino-, Japan, South Korea, the countries of the European Union, and the United States (U.S.). According to the Central Statistics Agency data (BPS), Indonesia's gas and oil export value to ASEAN countries from January to May 2014 reaching USD $ 12.03 billion is the second largest export after  export to countries in East Asia of U.S. $ 17, 55 billion.

ASEAN interstate commercial traffic and it will be increasingly obvious need solid banking role as a facilitator of payments. In the era of national banking MEA claimed a cross country service payment systems for a reliable, prime and safe. In the business of trading or banking trade finance will serve customers more corporate.

There are at least two key provision that must be held in an attempt to serve the national banking payment transactions cross country. One, a network of global offices. Two, information technology (IT) is adequate. In two cases, the efficiency can be established so that the original Indonesian banks have higher competitiveness amid the growing competition stringent banking business, including eventually have to compete with regional banks.

"Facing MEA we should be ready to compete. Security is the how, the infrastructure must be good, the system should also be good, as well, and of course efficient, "said Rosmaya Hadi, Executive Director of Policy and Payment System Oversight of Bank Indonesia (BI), the end of last June.

Associated with the opening of branches abroad, because a number of factors, among which is the regulation of each country, it is not easy for banks to open branches Indonesian origin in other countries. This then becomes an obstacle to national banks in maximizing service payment system in trade finance business. Meanwhile, cross-country network of offices that support trade finance business owned many foreign banks.

"With global office network, there are two things that can be achieved, first of efficiency of the process, from beginning cash management, trade from the start, too, and second, optimization of the supply chain," said Rico Tasmaya, Managing Director of Treasury and Trade Solutions, Citi Indonesia, last June.

Although the network has limited overseas office, in fact it did not make national banks shut the doors for trade finance business, which brings the fee based income. Bank Mandiri, for example. Banks led Gunadi Budi Sadikin successfully capture these trade deals worth U.S. $ 122.3 billion in 2013, or up about 6% from 2012.

Meanwhile, the five overseas branches and sub​​-branch, Bank Negara Indonesia (BNI) continues to boost its international business by optimizing remittance services, trade finance and cash management. In the first quarter of 2014, on a consolidated basis, the external branch BNI's success brings gains USD $ 2.64 million.

Limitations office network abroad by national banks covered by coupling with banks from other countries as partners or correspondent bank. That way, even in terms of the cost burden for the customers likely will be more expensive, banks will be able to treat the payment system for cross-country trade.

From the technology side, the adoption of more advanced IT becomes imperative to launch a payment in foreign trade activity. Section of, time and efficiency are important and valuable for corporate customers. It can not be obtained if the minimal banking services rely on technology. Through TI reliable, large volume of transactions that can done quickly by the bank. Therefore, it is not only happening in the retail segment, the era of electronic payment (e-payment) as all digital also started in corporate segment.

Increased IT infrastructure continue to do banking, including top banks, such as Bank Mandiri, Bank Rakyat Indonesia (BRI), and BNI. Bank Mandiri reached into the pocket US $ 125 million to meet the needs of IT development. IT development is directed at wholesale transactions, such as cash management and improve realibilitas trade finance. Increased IT efficiency is evaluated can provide to our clients, through features such as virtual accounts and payroll systems.

"Cash management can be more transactions to vendors, supply chain transactions. Cash management is also cut, accelerate payments. In the past, vendors have to wait two to three months now so it can complete the invoice directly, "says Francisca Nelwan Mok, Director of Corporate Banking Bank Mandiri, to journalists, mid-June last year.

Meanwhile, BRI with total capital expenditure of Rp 5 trillion this year up to RP6 trillion, about 55% digelontorkan to meet IT budget, including the expansion of electronic channels (e-channels). Similarly, the completion of BNI Rp2,7 trillion capital expenditure, most of which will be used to increase IT and e-channel expansion.

Innovation in IT Citibank also performed as part of a strategy to face MEA. Rico explains, IT innovation is done based on market needs. His view of the world is currently in the middle of developing three trends, namely globalization, urbanization, and digitalization. "We accommodate the second case (globalization and urbanization) to invest in digital. We have a lot of investment in innovation. Well, Citi, the Citi Innovation Center we have a duty to make Citi's unique value proposition that, "he said.

One of the results of IT innovation Citibank recently released is CitiDirect Banking Evolution with payments analytics feature that can provide visibility of the overall customer payment data. Service by Rico referred to as the backbone of e-banking at Citibank's corporate segment can be accessed via mobile smartphones and tablets.

Business competition in cross country clear payment system will last more intense when the ASEAN free market place. National banks will be challenged by foreign banks and regional services to be able to provide a fast and efficient payment for corporate customers.

As noted Rosmaya Hadi, which is also important, not only corporate clients shot from neighboring countries, national banks will also be able to secure the domestic market. How, to do innovation. "Local bank also make innovation because before this' right we gather all actors payment system. We say that BI is the first regulator in the field of payments system. Second, come ready-prepared to deal with MEA, "she said.

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