QUALITY OF SERVICE PROVES SMALL IS BEAUTIFUL, AND EFFECTIVE

ANTON HUDYANA Chief Executive Officer of Bank Artha Graha

Smaller can be better, argues Anton Hudyana, Chief Executive Officer of Bank Artha Graha, a privately-owned, medium-sized bank that emerged unscathed from the region’s financial turbulence and has gone from strength to strength since.
“We don’t think it’s important to be the biggest,” says Mr. Hudyana. “We would have to compete with the giants, and we prefer to be a niche player.”
The bank, which ranks towards the lower end of the largest 20 banks in Indonesia, mainly targets the retail sector, although it also has some corporate customers on its portfolio. Mr. Hudyana says the key to its success is the quality of service it provides, coupled with a strong degree of commitment from the shareholders and the management.

“We are known as a bank that is strong and credible. We have serviced all our obligations promptly and paid back each and every cent,” he says. That underlying performance meant that Bank Artha Graha was in a sufficiently strong position to be able to rescue another private bank at the height of the region’s financial turmoil in 1997. “It was the first successful merger during the crisis,” recalls Mr. Hudyana.
Current expansion efforts focus on substantial investment in information technology. “The tools in which we are now investing are the foundations on which we will grow, developing the efficiency and effectiveness of our back-office operations and enabling us to develop leading products and services for clients,” he says.
Mr. Hudyana sees the investment program as an essential response by the bank to the increasing shift towards globalization in the banking sector, both at home and abroad. “We believe that, by investing in the proper portfolio of foundation systems, we will be better empowered to react to the dynamic development within the Indonesian and global banking sectors,” he says.

“By looking to best practices in global banking, we are building a solid foundation on which we can be flexible to our customers’ needs. It is our customers who are driving our technology investments. Both our Indonesian and international clientele are rightfully demanding more from our banking products and services.
“Globally, we are seeing the development of services that can only be accomplished through increased knowledge of our customers, financial market information, communications, accessibility and availability. We are proactively responding to these emerging trends with our improved back-office banking systems and our initiatives in customer-focused electronic banking.”

In the wake of the financial crisis, Mr. Hudyana and his colleagues at Bank Artha Graha have identified growing opportunities for generating income from investment banking and the provision of fresh capital for companies as the economy grows once again.
“We never really stopped our lending activities, even during the crisis, although lending has indeed had to be done very selectively,” he says. “We realize that our intermediary function of supporting the Indonesian economy has to continue.” Lending has sped up since 2001, and Mr. Hudyana expects this to continue.
“We are considering plans to assist many companies, ranging from large corporations to small and medium-sized companies, either to help them restructure or refinance their operations, or to meet their requirements for additional working capital,” he explains.

Looking ahead, he believes that, while Indonesia is making progress to overcome the legacy of the Asian crisis, a lot of work still has to be done to fortify the system against further crashes in the future. “The currency, the rupiah, has recently strengthened but it is still very volatile. The present mood of domestic investors is very positive, but some fundamental issues still have to be resolved.”
Chief among these is proper regulation of the market and enforcement of its rules, where Mr. Hudyana freely concedes Indonesia needs to catch up. “We are probably behind our neighboring countries in that respect, not to mention the western world,” he says. “If this issue is managed well, I feel strongly that the rest will follow through automatically. The confidence of the local business community and foreign investors will grow and that will have a direct impact on the economy.”

Mr. Hudyana detects signs that Indonesia is reawakening interest in the international financial community. “Some foreign investors have shown an appetite for doing business here. They got rid of their investments a while back and therefore had limited exposure or none at all, so it makes sense for them to enter the market now,” he says. The key issue, he adds, is to ensure that they stay in Indonesia for the long-term.