In 2021, the COVID-19 pandemic is expected to remain an uneasy challenge and will continue to impact the global and domestic economy. CIMB Niaga, through Treasury Banking and Capital Markets, believes that the abundant liquidity in the market will still serve as a potential sale of investment products in the retail and institutional segments.
Based on the situation, Treasury Banking and Capital Markets will implement this strategy while continuing to focus on e-channel development and easy transactions of treasury products for customers. As for Sharia Treasury Banking, the Bank’s strategy in 2021 is to focus on purchasing capital market products based on sharia principles, as well as issuing Islamic investment products and sharia hedging to improve its competitiveness against other sharia and conventional banks.
Amid the COVID-19 pandemic throughout 2020, the global economy experienced a slowdown. The IMF estimated that the global economy would begin to recover in the second half of 2020 resulting in an aggregate global economic growth of -3.5% in 2020. Improvement in the global economy will continue until 2021. Meanwhile, Indonesian economic growth improved to -2.19% in 4Q20 compared to -3,49% in the previous quarter.
Banking industry CAR remained high at 23.41%, and the industry’s NPL ratio was kept low at 3.06% (gross) and 1.07% (net), despite the slowing intermediary roles of the financial sector due to weakening domestic demand and the prudent stance of banking due to the continuing COVID-19 pandemic.
The management of COVID-19 and challenges in the financial sector have affected consumer confidence and prevented further improvements in both consumption and investment. This pandemic has also affected
banking transaction needs. In addition, the pandemic has also impeded export-import trade transactions due to the disruption of supply chains as a result of border restrictions between countries.
This condition has encouraged the banking sector to accelerate transformation of digital payment and trade to support the “new normal” in consumer behaviour.
Transaction Banking (TB) anticipates these conditions through innovation, product development, and process efficiency, with a focus on serving customer needs based on digital technology.
Rapid technological advances in big data and artificial intelligence has provided new opportunities for the Bank’s business, and a spur for the Bank to move faster in innovations in order to adapt to customer needs.
Changes in consumption patterns and the rapid evolution of digital technology continues to affect the needs of both
STRATEGY AND POLICY
Transaction Banking continues to strengthen its product portfolio and focuses on providing the best services to customers, supported by a state-of-the-art digital banking platform. In 2020, Transaction Banking implemented a number of strategies and policies in order to provide the best services to customers and to spur product development in generating low-cost funding and fee- based income for the Bank, namely as follows:
1. Digital services, providing digital solutions and services to meet the banking needs of customers.
2. Digital documentation, utilising paperless technology for document services and product deliveries to customers in order to increase efficiency and security.
3. Customer experience, enhancing back-end system capabilities in order to optimise efficiency and improve customer satisfaction.
4. Intensifying cross-selling, by increasing the offer of product bundling to customers.
CASH MANAGEMENT
Over the years, the number of users and transactions in BizChannel@CIMB, the Bank’s internet banking platform for the non-retail segment, have continued to increase. This growth has prompted CIMB Niaga to strive continuously in meeting the expectations of customers and to keep itself abreast of the latest development in information technology, thus driving the growth of CIMB Niaga’s operating account.
The focus of Transaction Banking’s strategy in Cash Management services is as follow:
1. Digitalization, through product innovation and banking process.
2. Cross-Sell, instilling the cross-selling culture to increase product retention and customer preference for banking transactions with CIMB Niaga.
3. Flexible Solution, providing holistic Cash Management solutions that cater to the banking needs of customers.
4. Optimize Activity, increasing service penetration for cross border remittance and adjusting pricing to customers to maximise profitability.
5. Targeted Campaign, in order to stimulate customer product activation, launching programs aligned with the correct segments and customer needs.
TRADE FINANCE AND VALUE CHAIN
To support the export-import activities of customers, Transaction Banking has responded to the banking needs of customers by providing solutions in trade finance transaction services that are diverse and timely, and catered to customer preferences in both conventional and sharia deeds. The trade finance product lines include L/C, bank guarantees, and trade working capital solutions such as trust receipts, import and export financing, risk participation, and supply chain financing.
For domestic trade finance facilities, Transaction Banking has developed a payment system by which principals can expand their market and overcome their limitations supported by a strong electronic banking platform that monitors the status of invoicing, payment and others.
SECURITIES SERVICES
Transaction Banking provides Securities Services that comprise of custodian, fund administration, and trustee services. These services are provided to CIMB Niaga non- retail customers in the Non-Bank Financial Institutions (NBFI) segment, which includes insurance business, securities companies, investment managers and pension funds.
Securities Services also provide payment bank or settlement bank services. Pursuant to the mandate of the Indonesian Central Securities Depository (KSEI), CIMB Niaga is the only bank in Indonesia authorized to serve as a payment bank for foreign currency denominated transactions in the capital markets.
CIMB Niaga continues to be trusted by customers for this mandate, where currently CIMB Niaga is still one of the payment banks for the rupiah currency with the largest market share in Indonesia. The Securities Services unit is continuously enhanced as an anchor product of Transaction Banking to increase the fee-based CIMB Niaga and Customer Deposits from current accounts.