The Right Partner for PSAK-Compliance and
Successful IFRS-Implementation
An interview with Darwin Sariaatmadja, CEO of Abhimata Persada (PTAP), FERNBACH’s partner in Indonesia.
Banks in Indonesia will soon be required to prepare their balance sheets according to PSAK 50/55. This requirement is placing increasing pressure on banks there to find suitable IT solutions. Faced with a number of challenges including the consideration of new valuation methods; the use of specific valuation techniques for the exposure to structured finance and new formats in financial reporting and financial accounting, many banks have decided to completely replace their national financial accounting practices and to operate in full compliance with IFRS. FERNBACH’s partner in Indonesia, Abhimata Persada (PTAP), already has in-depth experience in the banking sector in Indonesia and is advising banks on IFRS implementation.
Question: Indonesian banks are faced with the two-fold challenge of first adopting the national PSAK 50/55 accounting standard and then progressively moving toward full IFRS compliance. Abhimata, an IT solution provider for the banking sector, has decided to address this new requirement by supporting FlexFinance implementation. Could you tell us a little more about your plan?
Darwin Sariaatmadja: Abhimata Persada (PTAP) already has been working in the banking sector in Indonesia since 1990. In that time, we have supported the country’s top 10 banks as well as the central bank with front-end and back-end solutions. These solutions include payment systems, fraud detection, treasury and trade finance as well as solutions for reporting to the Central Bank of Indonesia.
With the new ruling by the central bank making it clear that adopting new accounting standards will be a real burden for project teams across the country’s banks, PTAP made the strategic decision to enter the accounting market, which complements our existing capabilities.
Once we decided to enter this market, we began looking for the right solution to support our customers and found FlexFinance IFRS from FERNBACH. The global software company has a wealth of in-depth experience in handling international projects with large commercial banks through local partners. We have also integrated FERNBACH’s worldwide community to gain access to that experience as well as to valuable advice for successful project implementation.
The expert members of FERNBACH’s experienced support team add to our confidence that FlexFinance can meet not only Indonsian banks’ current requirements but also those of the upcoming IFRS 9. With such a strong partner, we know that we can shoulder the responsibility of these challenging projects.
Question: Why did you decide to go with FlexFinance from FERNBACH?
Darwin Sariaatmadja: Our initial criteria included experience with large commercial banks and a proven ability to process millions of deals each day. FlexFinance already has an impressive list of references “live”, a number of which are some of the world’s major commercial banks. Another important requirement was the software’s ability to deliver simplified versions of IFRS (currently PSAK in Indonesia) but also for it to provide more sophisticated approaches in line with those largely used by European banks. However, we also wanted a package that can deal with the current state of data quality in Indonesian banks. Since Basel II has not been adopted yet, critical data such as PD, LGD or accurate rating may be missing. FlexFinance can use historical data to generate PD, LGD, prepayment behaviour models and credit spreads. We believe that it is extremely important to have an integrated solution that can process data using historical information to generate D/C entries. When you take all of these criteria into consideration, it is clear that FERNBACH is the right choice for us. They not only have the experience but they can also provide the necessary support to bridge the gap between an overseas company bringing in advanced technology and the local Indonesian banking sector.
