Bank Indonesia Takes Steps to Mitigate Strategic and Compliance Risks
Jakarta, Indonesia - Bank Indonesia has implemented various measures to mitigate strategic and compliance risks in the banking sector. The central bank has developed several information systems to monitor and supervise banks’ activities, ensuring a sound and stable financial system.
Understanding Strategic and Compliance Risks
- Strategic risk refers to the risk caused by adoption and implementation of an inappropriate strategy for the bank, inappropriate decision-making in business affairs, or lack of responsiveness to external change.
- Compliance risk, on the other hand, arises from failure to comply with prevailing laws and regulations and other legal provisions.
Information Systems Developed by Bank Indonesia
To address these risks, Bank Indonesia has developed several information systems, including:
- Management Information System (SIM-SPBI): An integrated information system that supports the functions of banking supervision, examination, and control.
- Supervision Management Information System (SIMWAS): Designed to improve the effectiveness and efficiency of commercial bank supervision.
- Bank Investigation Information System (SIBADI): Developed to improve administrative discipline and facilitate ease of monitoring of investigation of criminal acts in the banking system.
- Data Mart: Provides information on institutionalization, ownership, management, operations, and supervision strategy adopted by a bank.
- Debitor Information System (SID): Assists in reducing dependency on conventional collateral and enables credit providers to assess the credit record of a prospect debtor as a substitute or complement to collateral.
- Rural Bank Supervision Management Information System (SIMWAS BPR): Implemented in July 2005 to improve the effectiveness of rural bank supervision.
Impact of Information Systems
These information systems are crucial in mitigating strategic and compliance risks in the banking sector. By implementing these systems, Bank Indonesia can ensure a sound and stable financial system that supports economic growth and development.
International Recognition
The central bank’s efforts to mitigate strategic and compliance risks have been recognized by international organizations, including:
- International Monetary Fund (IMF): Commended Bank Indonesia for its efforts to strengthen banking supervision and regulation.
- World Bank: Acknowledged Bank Indonesia’s initiatives as having improved the overall stability of the financial system in Indonesia.
Conclusion
In conclusion, Bank Indonesia’s efforts to mitigate strategic and compliance risks through the development of various information systems have demonstrated its commitment to ensuring a sound and stable financial system. These systems are expected to optimize data required for supervision and guided development of banks, improve administrative discipline, and facilitate ease of monitoring of investigation of criminal acts in the banking system.