supported by successful client expansion and
business community penetration into various
industries, as well as intensified cooperation
with Fintech entities. Also, implementation
of on-point strategies and policies in the face
of banking industry challenges also resulted
in effective product management for Cash
Management, Trade Finance, Supply Chain,
and Securities Services product offerings.
2018 global economic growth was driven by Gross Domestic Product (GDP) growth for several developed countries. On the domestic side, economic growth stood relatively strong at 5.17%, compared to last year’s growth of 5.07%. Driven by consumption expenditure, this growth was also supported by effective inflation management by the government and Bank Indonesia (BI). As this regard, BI increased the BI 7-Day Repo Rate by 175 bps from 4.25% in 2017 to 6.00% at year-end 2018.
The increase in BI 7-Day Repo Rate made a tight competition in terms of pricing among competitors.
Further it resulted on the decrease of Net Interest Margin (NIM) across the banking sector. Internally, CIMB Niaga and particularly Transaction Banking, had anticipated these conditions by encouraging cross- selling of bundled products and deepening wallet shares. This was marketed to existing customers on all fronts to spur growth in business volume.
CIMB Niaga Transaction Banking provides wide- ranging products and services for its Corporate customers, including large corporations and MSME, Bank Financial Institutions (FI) and Non-Bank Financial Institutions (NBFI) sectors. Products offered by CIMB Niaga include cash management, trade finance, supply chain, payment and settlement services, custodial and fund administration services, and trustee services.
STRATEGIES AND POLICIES
CIMB Niaga understood that economic factors are not the only challenges that must be solved; it includes the development within banking information technology in the form of digital banking. We have already seen changes in consumption patterns, and, with the proliferation of Fintech, there is a will from the community-at-large and the corporate sector to have banking services that are easier and faster.
In order to address all challenges in 2018, Transaction Banking strengthened its product-line by focus on providing the best customer service which supported by a reliable digital banking platform. In 2018, Transaction Banking implemented a range of strategies and policies to deliver the best service and to encourage product development that boost up CASA and fosters fee-based income. These included:
• Innovation in digital services, to provide a banking ecosystem that suit with the needs of Fintech clients.
• Enhanced capabilities of the back-end system, to optimize efficiency and enhance customer experience and service satisfaction.
• Intensified cross-selling, to highlight new product bundling offerings to customers.
• Expanded MSME customer-base via tailored digital products, to meet customer needs.
• Community banking focus through re-designed products and services, to engage a whole business community, both the Principal and Down-the-lines.
• Trade Finance growth by increasing customers’
accessing of Trade Finance facilities.
Implementation of Transaction Banking strategy and policy is supported by developments and innovations on re-engineering service process in order to provide the best service for every customer. On the on-boarding process several has been done is summarizing the number of opening pages for current accounts and BizChannel@CIMB, Shorten turnaround time for registration and activation of BizChannel@CIMB, and, Automation of back-end processes. The result of these initiatives initiates a faster customer service and reduced operational risk.
Cash Management
Every year, the numbers of users and transactions from BizChannel@CIMB, the internet banking platform for the non-retail segment, continue to increase. Such transaction growth has encouraged CIMB Niaga to continually meet customer expectations and continuously self-update with the latest information technology developments and further stimulate the growth of CIMB Niaga’s operating accounts.
The focus of Transaction Banking’s strategy on cash management services are as follows:
• Digitalization, through product innovation and strategic partnerships with Fintech customers.
• Cross Sell, instill a culture of cross-selling to increase product holdings and stickiness for CIMB Niaga banking customers.
• Customer Experience, through efficiency and fine- tuning of CIMB Niaga business processes with the aim of meeting customer banking needs and increasing loyalty.
• Optimize Activity, through increased penetration of cross-border remittance services and adapted price points to maximize profits.
• Risk & Compliance, implementation risk culture and compliance on all fronts.
Trade Finance and Supply Chain
CIMB Niaga Transaction Banking provides a wide range of Trade Finance services to support customer export- import activities. Trade Finance products covered traditional trade products such as L/C’s and bank guarantees, as well as trade working-capital solutions such as trust receipts, import and export financing, risk participation, and supply chain financing.
For 2018, the focus of the CIMB Niaga Trade Finance strategy targeted business growth through increasing trade loan volumes. Domestically, CIMB Niaga Transaction Banking rolled out new Supply Chain solutions to support the growth of customer businesses. Financing facilities were provided for every business players in transaction chain cycle (suppliers, distributors, and retailers), with appealing financing facilities as an inventive. Supply Chain processes are also supported by reliable electronic banking platform to monitor the status of invoices, payments and other business services.
Securities Services
CIMB Niaga, through Transaction Banking, provides the following services: custodial services, fund administration, and trustee services. Securities Services provides solutions to CIMB Niaga’s non- retail customers in the non-bank financial institution (NBFI) segment, which include insurance, securities companies, asset managers and pension fund managers.
Securities Services also acts as payment bank or settlement bank. CIMB Niaga is one among many banks in Indonesia that given a trust as a cash settlement bank for capital market transactions, as mandated by the Indonesia Central Securities Depository (KSEI).
Transaction Banking
CIMB Niaga has the largest market share of settlement banks, this indicate a continuance high level of customer trust on this mandate. Securities Services continues to be an anchor product for Transaction Banking and will continue to be developed in order to assist in increasing fee-based income and raising current accounts.
STRATEGIC COOPERATION
In addition to implementing the above strategies and policies, in 2018 Transaction Banking also established strategic cooperation with several large corporations by using continuous product and service innovation.
Such cooperation included:
• Strategic collaboration with social security providers to offer end to end Cash Management solutions in order to support government programs that assist people nationwide in obtaining social security benefits.
• Strategic collaboration with oil and gas companies by providing end to end Cash Management solutions and Trade Finance to retail gas stations.
PERFORMANCE 2018
For 2018, Transaction Banking recorded a satisfactory performance and achievement. The positive performance in 2018 was a result of successful expansion efforts and penetration into business communities within various types of industries.
Transaction Banking has been effectively adopt strategies and policies in order to address challenges in the banking industry, through implementation its products as Cash Management, Trade Finance, Value Chain and Securities Services strategies and policies.
Troy Parwata Chief Financial Officer PT Wahana Duta Jaya Rucika
PT Wahana Duta Jaya Rucika, previously known as PT Wavin Duta Jaya, has been established since 1973 and known as the largest PVC producer with its pipe glue variatons in Indonesia.
In order to cater our business needs, we need a bank that has good track record and offer variety of solutions to streamline the operational process and provide efficient costin payment. Through rigorous Request-for-Proposal (RFP) process, we have chosen PT Bank CIMB Niaga Tbk. as our main cash management bank that covered payment, collection and liquidity solution through physical cash concentration structure. In addition, PT Bank CIMB Niaga Tbk has also helped us in establishing Wahana Vinyl Nusantara’s Treasury Center through Cash Pooling system.
We look forward for more support and partnership with PT CIMB Niaga Tbk. in the future.
In Cash Management, the number of BizChannel@
CIMB users grew by 11.83%, while the number of transactions through BizChannel@CIMB increased by 31.78%. This achievement had a positive influence on CIMB Niaga’s operating account growth, where the average volume of Rupiah currency of current accounts increased by 9.11% in 2018.
For Trade Finance services, in 2018 growth of Trade Finance Loans and current accounts from Trade clients were 49.67% and 16.02% respectively. Value Chain services posted an increase in 2018 loan volume and demand deposits by 56.76% and 65.80% respectively.
Securities Services gained an increase in 2018 fee- based income of 27.44% compared to the previous year. This growth was mainly driven by an increase in fee-based income from Custodial Services of 36.05%, while the total asset under Custodial Services grew by 17.46% in 2018.
Transaction Banking
AWARDS
Among all challenges, Transaction Banking strives to improve operational efficiency through improved work processes. Also, regular performance monitoring and the analysis of target achievements is a priority to measure the effectiveness of policies and strategies.
Through these efforts, CIMB Niaga Transaction Banking was able to achieve external recognition in the form of the following awards in 2018:
• The Asset Triple A Treasury, Trade & Risk Management Awards 2018 as Best Cash Management Solutions for NBFI Industry in Indonesia.
• The Asset Triple A Treasury, Trade & Risk Management Awards 2018 as the Best Cash Management Solutions for Oil / Gas Industry in Indonesia.
• The Triple A Treasury Asset, Trade & Risk Management Awards 2018 as Best Service Provider for e-Solutions Partner in Indonesia.
• RED Money Islamic Finance News Awards 2018 as the Best Deal of the Year in Indonesia for Bonds &
Sukuk.
PLAN FOR 2019
Transaction Banking plans the business as follow for 2019:
• Intensive collaboration with Fintech, through continuity of its digital service innovations in order to deepen market penetration.
• Customer Experience, by conducting re- engineering of business processes and continuous product development to provide service efficiency and increased customer satisfaction.
• Sharia Trade Finance, development of Trade Finance products according to Sharia principles as a differentiation in meeting customers’ banking needs, both domestically and MISTC customers within the CIMB Group network.
• Account Planning, enhance strategic synergy and cross-sell coordination between business units in order to maximize profitability.
• Customer expansion, strategic collaboration with Financial Institution teams to optimize new business opportunities from customer referrals.