On the Road to PSAK Compliance - with the Right Partners
Interview with Jopie Mambu, Director of Banking Unit, SANSAINE Exindo, FERNBACH’s Indonesian Partner.
As of 2010, banks in Indonesia will be required to prepare their balance sheets according to PSAK 50/55. This requirement is placing increasing pressure on these banks to find a suitable solution.
Faced with a number of challenges, including the consideration of new valuation methods such as the use of specific valuation techniques for the exposure to structured finance as well as new formats in financial reporting and financial accounting, many banks have decided to completely replace their national financial accounting practices and to operate in compliance with IFRS. FERNBACH’s partner in Indonesia, consulting firm SANSAINE, is advising banks in implementing IFRS.
We talked to Jopie Mambu, Director of Banking Unit, SANSAINE Exindo, about these banks´ IFRS projects and what he has seen so far.
Question: How have you prepared the transition period from a leading telecommunications company to the banking sector with special focus on delivering a PSAK solution?
Jopie Mambu: First of all, we made the decision to transfer our vast experience in delivering large-scale critical projects on time and budget-compliant from the telecommunications to the financial sector.
We detected that, within the next 5 years, a major IT transformation plan will take place in financial institutions so that all new regulatory measures such as PSAK, Basel II or ICAAP can be adopted.
PSAK 50/55 is our first priority. We believe that the adoption of International Financial Reporting Standards will make deep changes in the current IT architecture and will also modify the way the business is controlled and managed.
To make a credible offer, we decided to import to the Indonesian market the leading IFRS solution especially for large commercial banks and to build-up a pool of qualified resources capable of supporting implementation and on-going maintenance.
After 10 months of effort and investment with our partner FERNBACH, we have reached a level of skills and confidence that allows us to take the responsibility of the complete PSAK project.
Question: Mr Jopie Mambu as Director of the Banking Unit, tell us more about your PSAK Competence Centre to support FlexFinance?
Jopie Mambu: Our primary mission was to select the best IFRS system. Our main criteria were: capability of the package to provide an integrated process from data collection to generation of D/C entries under IFRS, to support daily processing involving large data volumes (several million) based on a delta approach but also to supply preconfigured import templates, business cases, full accounting logic for all financial instruments and a freely configured CoA.
Although this was not enough because we also wanted a solution already implemented and validated by auditors in many different countries.
Furthermore, to perfectly cope with the Indonesian banking sector, the functional module must be able to start its processing from historical data (PD, prepayment behaviour model and credit spread).
FlexFinance has these qualities and the different reference visits and calls we made confirmed that banks are daily producing fully compliant balance sheets and P&L accounts.
Finally, in collaboration with FERNBACH, the reporting requirements laid down by the Bank of Indonesia will also be configured in the FlexFinance software solution. This will enable us to offer an integrated process ranging from data collection to BI reporting with audit trail capability.
The initial PoCs realised have already confirmed the superiority of FlexFinance in terms of readiness and flexibility since it offers simple methods or a more advanced approach based on experience.
In parallel, we have greatly scrutinised and selected key resources to handle the different tasks involved in PSAK projects.
