ASEAN bankers discuss strategies in globalization era
ASEAN bankers discuss strategies in globalization era
By Hendarsyah Tarmizi
NUSA DUA, Bali (JP): Bankers from the countries of the
Association of Southeast Asian Nations (ASEAN) began a three-day
conference yesterday which will focus on strategies for facing
the trend towards the globalization of banking services.
ASEAN Bankers Association Secretary-General Tay Kah Chye said
that the strategies discussion was among the main items on the
agenda of the meeting, which will last until Saturday.
He said that 140 bank executives from ASEAN's six member-
countries were participating in the meeting, which is expected to
come up with concrete proposals for responses to the
globalization of banking.
"It is one of the most crucial issues which should be
addressed by ASEAN bankers," he said of the liberalization of the
world's banking industry.
The association's concern over the negative impact of the
liberalization does not necessarily it opposes the globalization
of banking services, he said in reference to the demand for the
removal of operational restrictions on foreign banks in
developing countries.
"We are absolutely not against the globalization idea, but we
still need much time to prepare ourselves," he told journalists
before the opening of the meeting of the council's permanent
committees.
"If we liberalize our banking industry now, we will certainly
be killed," said Tay, the president of the Singapore-based ASEAN
Finance Corporation Ltd, a finance firm owned by the association.
Minister of Finance Mar'ie Muhammad is expected to deliver his
keynote address to the conference today.
In addition to setting out strategies in facing the
globalization era, the council's permanent committees will also
hummer out the details of the organization's cooperation programs
which were approved during its 24th congress in Cebu, the
Philippines, last November.
Rafael B. Buenaventura, the chairman of the association, said the
improvement of mutual cooperation in networks and technology
should not be ignored because these would play a decisive role in
enabling "indigenous" banks in the region to compete with more
developed financial institutions from industrialized nations.
Another essential question in facing the free market era is how to
expand the cooperation arrangements among ASEAN banks into "a
more business-like framework," said Buenaventura, who is also an
executive of the Association of Philippine Bankers.
He said that cooperation among ASEAN banks, which is now
mostly focused on exchanges of information, should also cover
other fields, such as sharing customers or a syndication in
financing activities.
"Banks, which still mostly focus their operations on their
respective countries, should also study the possibility of taking
advantage of the growing business activities in the other ASEAN
countries," he said.
Iwan R. Prawiranata, the chairman of the Federation of
Associations of Indonesian Banks, agreed that there was a need to
improve technology and software cooperation among ASEAN banks.
"In addition to an increase in the capital, improvements in
banking technology and software are a must in enabling ASEAN
banks to compete with those from developed nations," he said.
He said that such a cooperation arrangement need not
necessarily be carried out through the establishment of a
permanent body.
"It can be carried out bilaterally or under a non-formal
framework, because under this approach the cooperation could be
more effective," he said, adding that Indonesian banks, which at
present mostly use out-dated banking software and technology,
could cooperate with their more developed partners in Singapore
to gain wider access to the global banking network.
Iwan, who is the president of state-owned Bank Bumi Daya, said
Indonesian banks had no alternatives but to improve their
technology, software and human resources to enable them to
survive in what are expected to be more competitive conditions in
the coming years.
"Those three factors should come first, before they decide to
strengthen their capital," he said. "It is also essential to
raise the capital but it will be nothing if you have poor
management and lack reliable technology."