What next after the banking crisis?<\/p>\n
By A. Putu Mandau Wijayanto<\/p>\n
Tremors from the economic crisis did not only wiped out ailing
\nbanks and cause widespread layoffs. Bank customers now wish for a
\nsense of security from those banks which survived the process of
\nclosures within the past year. Security tops the list for every
\ncustomer, but it is an intangible concept. Thus, the problem is
\none of perception. If the restructurization of the banks proceeds
\nsmoothly, some of the problem will be solved.<\/p>\n
Efforts to recover the sense of security among customers is
\npart of the Indonesian bank consolidation efforts.
\nRestructurization has reaped moderate results. Indonesian banking
\nregulators have made advances in transparency. This is evident
\nfrom the recent liquidation of various banks, which did not cause
\npanic among customers because of the government's guarantee of
\ntheir deposits.<\/p>\n
Our research conducted showed that there was a sense of
\nsecurity concerning state banks. Of course, it is hardly a
\nstrange perception that state banks are considered safer. In the
\nfuture, however, it is not unforeseeable that the perception of
\nsecurity could be lost by state banks. Their management could
\nembark on an incorrect strategy, which is why state bank
\nadministrators should not be complacent about their seemingly
\nsecure position.<\/p>\n
Our research shows that private banks are superior in their
\nservice, such as in efficiency, responsiveness to customer needs,
\ncontinually update their ATM systems and provide flexible opening
\nhours. Following consolidation, banks boasting these superior
\naspects will be more competitive.<\/p>\n
To hold this competitive edge, domestic banks cannot be
\nremoved from the two concerns of security and superior service.
\nIt is a must for a bank to have both qualities because foreign
\ncompetitors not only boast these, but also excel in management
\nleadership, technological and financial innovation skills, are a
\nlow-cost producer of commodity products, have brand-name
\nreputation, integrated delivery of products, product leadership,
\netc.<\/p>\n
All these are central as key drivers of competitiveness. It is
\nhigh time Indonesian banking considered acquiring these aspects
\nas competitive edges. Additionally, technological innovations in
\ninformation technology are forecast to play a major role with the
\nadvent of the e-commerce era.<\/p>\n
E-commerce infrastructure must be ready for development not
\nlong after this economic crisis ends with Nusantara 21. From a
\nsmall scale, e-commerce will spread rapidly. It will be only a
\nmatter of time after the crisis ends that a boom in ATMs,
\ntelephone banking and Internet banking will follow in Indonesia.
\nAt that time, the number of branches a bank has will no longer be
\nthe most important concern. \"Branch banking is not a dinosaur!\"
\nmay be the cry.<\/p>\n
It has already occurred in America. In the 1980s, there was a
\nboom of ATMs and telephone banking which sealed the death warrant
\nof many bank branches. In the U.S., ATM usage has soared to about
\n700 million transactions annually -- and 40 percent of households
\nuse telephone banking. With the spread of the Internet, the
\nphysical distribution of bank branches -- and making transactions
\nin them -- is no longer a major priority, although this does not
\nmean it is not a necessary consideration.<\/p>\n
But a bank like BCA, for instance, will inevitably be better
\nprepared to enter the new era because it possesses the
\ninfrastructure; after all, it has the most ATMs of any bank in
\nIndonesia. Such infrastructure depth means BCA is ready to serve
\ndifferent market segments.<\/p>\n
Yet, it cannot be denied that physical distribution through a
\nbank's branches remains important. Generically, we can identify
\nthree segments of bank customers. They are the traditionalist,
\nthe service seeker and the technology embracer. In the
\ntraditionalist segment, customers will inevitably be more
\noriented to making physical transactions at the bank itself (65
\npercent), with fewer using ATMS (30 percent) or telephone banking
\n(5 percent). Among service seekers, 45 percent prefer physical
\ntransactions in a branch and 40 percent use ATMs; a mere 15
\npercent use telephone banking.<\/p>\n
For technology embracers, most, or 55 percent, use ATMs, 25
\npercent rely on telephone banking and the remainder use physical
\ntransactions at a branch.<\/p>\n
Technological development has led to innovative routes, like
\nonline services, ATM, direct mail and phone channels in tandem
\nwith the growth of networks and physical distribution, all of
\nwhich have been intensively developed recently by Citibank with
\nits ATM Boutiques. It is trend likely to flourish in the future
\nas banking consolidation takes shape.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/what-next-after-the-banking-crisis-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}