Finastra, today announced that it is bringing IFRS 9 compliance capabilities to Indonesia through a local Government accredited data center, helping regional and medium-sized banks take the necessary action now to comply with the new financial reporting standards due in January 2020.
As Indonesian banks prepare for the implementation of the local IFRS 9 equivalent, Instrumen-Keuangan-PSAK-71 (PSAK 71), the Finastra software-as-a-service (SaaS) Regtech solution will help them prepare the necessary reports for compliance. Banks are able to send relevant information to the data center, hosted by Praweda Ciptakarsa Informatika (Praweda), who will classify the data, perform the necessary calculations and generate the relevant accounting metrics, balance sheets and reports, using Finastra’s Fusion Risk.
Imad Abou Haidar, Managing Director, Asia-Pacific at Finastra said, “Indonesia’s financial services sector sits amidst a fast-evolving regulatory landscape. With regulations to enhance governance and risk management activities continuing to evolve, the introduction of PSAK 71 is just the beginning of Indonesia’s compliance journey. Often, smaller and medium-sized banks leave preparation late,underestimating how many tentacles IFRS 9 has and how far they reach. Our successful track record of using Fusion Risk to help clients around the world to build an IFRS 9 risk-compliant framework stands us in good stead as we support customers in Indonesia with PSAK 71.”
“IFRS 9 implementation is a transformational event for financial institutions globally, and its associated reporting requirements create challenges not just for global franchises but also for regional and medium-sized banks,” said Rob Stubbs, Head of Research at Chartis, an independent research house that has done recent analysis of IFRS 9 and its related technology solutions. “We see significant variation in the level of preparedness across the industry, with some institutions fully prepared and others adopting short-term tactics or deploying last-minute fixes to meet the deadline. Efforts to address the requirements of IFRS 9 should not be underestimated.”
To enable banks in Indonesia to meet the deadline smoothly, Finastra has also teamed up with PT Abhimata Persada (PTAP) who will provide client support servicing and Neoflex Consulting (Neoflex) who will offer consultancy in recalibrating and building Probability of Default (PD), Loss Given Default (LD) and Exposure at Default (EAD) models to help banks in Indonesia to stay compliant in a cost-effective and performance-efficient manner.