Regional partner enables IFRS convergence in Indonesian bank with ready to use software


In recent years, Indonesia has shown its commitment to gradually align local (PSAK) with the international accounting & financial reporting standards (IAS/IFRS). Convergence has numerous advantages and will lead to a higher quality of accounting practices. But crucial IFRS standards like IFRS 7, IAS 32 and IAS 39 on Financial Instruments can also cause uncertainty. These standards change the old paradigm of classifying, recognising, measuring and disclosing financial instruments. Many Indonesian banks are not yet prepared for this “new” regulation of financial instruments.

Our customer was facing the following challenges:

  • How intensive are the effects on our accounting financial system?
  • Will the differences between IFRS and PSAK affect key performance items in our organisation?
  • What is the potential workload for the departments involved?
  • Will we achieve the deadline?
  • How to start the procedure?

To cope with these challenges and to take advantage the bank chose a solution for Accounting, Risk & Reporting – ready-to-go.

About the bank

The business activities of our customer are engaged in commercial banking. The bank offers both retail and corporate banking. It provides personal banking services as well as a wide network of ATMs and SMS banking services to handle transactions conveniently and everywhere. Its corporate banking services include working capital financing, investment loan, export and import financing, letters of credit and bank guarantee. Headquartered in Jakarta, the bank has several offices across Indonesia and will strengthen its position in banking industry nationwide.

About the project

FERNBACH is implementing together with a leading regional ICT company the FlexFinance Ready-to-go-solution. This solution contains pre-defined processes, pre-defined setup, pre-defined rule-sets and standard reports and can be implemented in any existing IT landscape. It makes use of best practice experience which has been gained through numerous implementations at different customer sites. The approach consists of three phases and involves the collaboration of all three affiliates whereas the bank needs to provide information on output requirements and has to review the output results. FERNBACH prepares the configured system and develops the interfaces. This includes configuration of EIR, AC, PD/LGD models, impairment, IBNR-risk provisioning and delivery of reporting data marts. Whereas interfaces to the source systems are developed by the reginal partner. After installation, the system is tested with a full set of the bank’s data, and forms a basis for production usage. In the final phase the user acceptance test takes place and the system is switched over to production usage, using the initial data load that was already prepared.

Our customer benefits from:

  • minor software changes
  • minimal configuration
  • minimal bank involvement
  • ready-to-use software out-of-the-box
  • business and end-user-training workshops
  • rapid decision-making and timely responses