Having acknowledged that banking industry realm is getting more advanced and more competitive, the listed and the non-listed Banks then require a verge of qualified hands involved as a maneuver of each side in supporting the emergence of consistency and their business’s expansion. 

The whole-challenging atmosphere does propel Banks to eternally revitalize and to perpetually innovate technology-based services in order to make the business activity pin on the right aim. 

The strategy applied is a manifestation of Banks' fortitude in transforming every challenge into a business perspective which could deliver perspicuous leverage for all sides.

In other respects, Banks needs to realize that professional and well-built Human Capital are one of the factors of their ascendancy in giving a blatant contribution which prominently puts the customers’ and all stakeholders’ satisfaction on top of any interest. 

By posing synergy in constant effects, the Companies might convince every policy made and decisions taken would lead the them to the paramount of their existences.

Global Macroeconomic Conditions in 2018

As we all together recognized, the global economic development of 2018 in a basis of Monetary Policy Review and Finance of Bank Indonesia published on December 2018 succeeded reaching into point of 5.10% (yoy), compared to 5.02% (yoy) the erstwhile year. 

As the several developed countries’ economic condition was at its stagnant base, Indonesia managed to display its prominence by being able to encounter global situation achieved from distinct reformation initiatives. 

Indonesia’s economic development was transcendentally supported by the escalation of commodity export which as well encouraged the advancement of non-building investment, particularly on the commodity-based cooperation. 

Volatility and market ambivalence, however, took some accounts towards certain business sectors comprised the businessmen in a banking industry’s stance.

Not only Indonesia, but also Europe has underwent a significance in her Economics supported by the increasing export amidst a steady consumption and investment. Europe’s export performance was in line with the recovery of the United States economy, Europe’s main export destination. 

One of the indications of Europe’s increasing rate of consumption in 2018 was an increase in the rate of retail sales and Economic Confidence Index from the previous year. Another, the waxing of average growth of construction output and household investment rate indicated that investment performance was getting better.

Japan was another country with an advanced economy that experienced growth. In 2018, Japan’s economy grew by 1.6% due to a positive growth in consumption and private investment, as well as a solid rate of net exports. 

The increase in consumption was marked by a positive trend in the consumer confidence index while increasing private investment was driven by positive development in the industry sectors, particularly the increasing of demand for electronic goods and equipment. 

Apart from the private sector, Japan’s investment was also supported by the government’s fiscal stimulus through the investment for future program. Export performance started to recover along with the global economic improvements, and the depreciation of the Japanese Yen against the US Dollar. 

The rise in export was mainly associated with the rise in export to Asian countries, especially China, for semiconductor products and tools. 

In 2018, the China’s economic growth was as  escalating as the other developed nations supported by export, amidst positive consumption and investment. China’s export increment ran parallel with the strong global demand, mainly driven by economic recovery of advanced countries. 

The solid growth was demonstrated by a number of indicators, such as household disposable income significance, consumption in the services sector increment, and continuous growth of the consumer confidence index. 

Other than that, the retail sector proceeded to be at the peak, but it underwent a slight effect of waning caused by the slow growth of automobile sales equivalent to the government’s policy, namely pollution control.  

The increasing of world trade volume driven by the performance of export in 2018 was equivalent to the betterment undergone by global economic recovery. Global commodity prices, including the price of oil, experienced incremental growth due to increasing demand, and the realization of OPEC and Non-OPEC countries’ commitment to cutting oil production.

The condition of the banking industry in 2018 remained stable amidst the weak banking intermediary. The stability was reflected in the high capital adequacy ratio of 23.0% and liquidity ratio of 21.5% in December 2018. 

The effort to strengthen credit risk management resulted in a decrease of the rate of Non Performing Loans (NPL) to 2.94% (gross) or 1.53% (net) by end of 2018.

Nevertheless, we are commencing 2019 with some global uncertainty risks. The uncertainty of the global financial market, particularly related to the expectation of the Fed Fund Rate increase, is placing pressure on global currencies.

Yet, macroeconomics stability and Indonesia’s economic prospects are expected to positively support the Rupiah’s future exchange rate. 

A few strategic policies getting cautiously-prepared by the management of Banks in Indonesia were tended to pursue the golden achieve. Within the annual reports, we would outline all of the strategic policies taken by the Banks to face the challenges of 2018, the Bank’s performance achievements, and the Bank’s future business prospects. 

Furthermore, the banking industries attempted to improve their Good Corporate Governance (GCG) have continually shown prominent outputs. 

The Board of Directors of every Bank was beyond sure that an equitable GCG implementation would keep up the Banks' consistency and transparency in being responsible for the shareholders and the stakeholders.

Information Technology Application

Some of the Banks continually invest in information technology development to step up their customer service and satisfaction. They believe that in this 4.0 technology era, competition is fought off by speed, accuracy, convenience, and security for customers, at both branch offices and online. 

In order to achieve this, they are required to advance an information technology work plan in 2019, which included implementing a new core banking system application to support their business growth plan and completed the implementation of the Finance Information Service System (SLIK). 

The revitalization of the core banking system application was done by migrating the legacy system to the new Finacle system. This was completed by the end of 2017. 

Finacle is a system that integrates almost all the banking modules, such as Core Banking, Retail Internet Banking, Corporate Internet Banking, Mobile Banking, Treasury, Trade Finance, Loan Organization System, and other technicalities. 

In order to tighten security, the Banks have got to replace its Internet Banking security system. In addition to this, they need to install a File Server within the their internal working environment to ensure data security.