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  • 1. BANKING INDUSTRYPresented by:Anggi Ratna
  • 2. ProfileAnggi Ratna Utami, S.SiGraduated on July 2005 from Mathematics ITB, majoring on Mathematics Finance.Company Position PeriodStandard Chartered Bank Consumer Business Analytics Sep’11 – presentBank Internasional Indonesia Risk Management, Nov’09 – Personal Loan & Merchant Risk Policy Manager Aug’11Citibank, NA Risk Management, Oct’08 – Personal Loan Acquisition Policy Analyst Nov’09Citibank, NA Risk Management, Dec’07 – Branch Product / Banking Policy Analyst Oct’08Citibank, NA Personal Loan Business, Feb’06 – Marketing Acquisition Analyst Dec’07Citibank, NA Personal Loan Business, Jul’05 – MIS for Sales Operation & Support Feb’06 anggi.ratna@gmail.com
  • 3. Overview
  • 4. Basic Principle of Banking Three Lines of Defence (TLD)Risk Internal Risk AuditTaking ManagementUnit Unit Assessing Risk: Providing assurance Measuring & that Risk monitoring whether ManagementActually Managing risk occurredthe Risk Framework is effective 1st Line of Defence 2nd Line of Defence 3rd Line of Defence
  • 5. Segmentation of Banking Customers Loan size Household income IDR millions IDR millionsAffluent SME, > 400 Commercial, Affluent Turnover of IDR 350-1,000mio; Corporate Small family-owned business; Mainly in retail & trading; 200 Typically with <20 employees Mass -Affluent Small 150 - 400 Business Professional 50 Low-middle working Turnover of IDR 10-350mio; Credit Class class (white-collar Micro Enterprises; Mainly stall workers) 25 - 150 owners & petty traders Mass Micro 5 Business Government Servant; Lower Mass Blue-collar 5 - 25 workers 1 Non- Bank- Non-Bank-able able Self Employed Employee Source: Asian Demographics; Bank Indonesia; BPS
  • 6. Function Units on BankingConsumer Bank Risk Management Finance Human ResourcesCorporate Bank Audit Technology Corporate Affair Treasury Legal Operation Compliance Special Asset Management
  • 7. Consumer Bank Lending Wealth Management Transaction Banking Consumer Finance
  • 8. Corporate Bank PRODUCT SEGMENT Transaction Banking Trade, Cash Management, Securities Services Global Financial Markets Corporates Derivatives, Foreign Exchange, Rates, Structured Trading and Products, Capital Markets, Loans Syndications, Asset- Financial backed Securitisations Institutions Corporate Finance Corporate Advisory, Project and Export Finance, Structured Trade and Structured Finance Local Corporates Principal Finance Real Estate, Corporate PE, Alternative Investment, Group and Infrastructure
  • 9. Risk Management
  • 10. Risk Management Process Identification Measurement Mitigation Monitoring
  • 11. Type of Risk1 Credit Risk Risk that the debtor fails to repay its loan2 Market Risk Risk that the movement of interest rates will cause an unfavorable impact to the banks trading book and banking book3 Liquidity Risk Risk that the bank suffers when it has not enough fund to pay its obligation at any given time4 Operational Risk Risk caused by failure of system, people, and external event5 Reputational Risk Unfavorable effect of negative publication6 Compliance Risk Risk of the bank being non comply with its regulator7 Legal Risk Risk of the bank sustaining losses from lawsuit Risk of the bank wrongly applying its strategy, which is resulted in8 Strategic Risk worse performance in the market compared to its competitor
  • 12. Control the risk Credit Risk Apply standard for collateral, set-up minimum risk level via our credit risk rating Market Risk Perform hedging via forward contracts, options, and/or other Liquidity Risk derivatives. Operational Risk Apply SOP (Standard Operating Procedure), technology updates, stress test of equipment and personnel Reputational Risk Actively educate our customers regarding our products to avoid misunderstanding that will lead to customer complaint Compliance Risk Perform compliance review of our alignment with regulatory requirement Legal Risk Countermeasures in the form legal actions Strategic Risk Proper market study
  • 13. Consumer Bank
  • 14. Consumer Bank Lending Wealth Management Transaction Banking Consumer Finance
  • 15. Key Driver for Consumer Banking Financial Performance Volume GIM NII x - COF NIM Revenue + NFI Working profit - Indirect Cost +Trading profit - Direct + People GCO Premises IIP - Net Tech and ops Loan recoveries impairment + Others PIP (provision)GIM = Gross Interest MarginCOF = Cost Of FundNIM = Net Interest MarginNFI = Net Fee IncomeNII = Net Interest IncomeGCO = Gross Charge Off  penghapusan kredit macetIIP = Individual Impairment Provision  GCO - RecoveryPIP = Portfolio Impairment Provision  pencadangan macetLI = Loan Impairment  IIP + PIP Total Bad Debt
  • 16. Key Driver for Consumer Banking Financial Performance10080 35 7 1760 33 10040 2 75 1320 42 31 0 GII COF NFI Contra Total Total Cost Working GCO Recovery TP Revenue Revenue Profit
  • 17. Banking Customer Proposition Acquisition Retention Cross sell •Do products have the right value proposition for customers Product •Does it fulfill customers’ need •Is pricing less than the perceived benefits from the customer’s perspective Pricing •Is pricing structure favorable to the customerPromotions/C •Is promotion compelling for customersommunication •the right communication to reach out customers •Reach versus accessibility Distribution •Are we convenient for the customers to use •Do banking people understand the product sufficiently to communicate its value People to customers •Are banking people competent to provide value added advise •Are processes efficient to deliver this value proposition at the lowest possible Processes price •Are processes onerous on our customers •Have we priced sufficiently for risk- risk based pricing Risk •How do we ensure we have the right risk infrastructure to manage our clients
  • 18. Tips to Fresh Graduate to Enter Banking Business
  • 19. • Passion and Committed• Build Good Relationship / Networking• Integrity and Respect• Dedicated to Team Work• Be Open Mind• Exceed other expectation ( Excel)• Job is different with career• Sell yourself• Improve English capability (both verbal and written) and knowledge of computer applications• Know the Company and business• Attitude is the most important
  • 20. THANK YOU