Finastra brings IFRS 9 compliance solution to Indonesia

Finastra has launched its IFRS 9 compliance capabilities in Indonesia through a local Government accredited data center.

Through the launch, regional and medium-sized banks will be able to take ‘the necessary action’ now to comply with the new financial reporting standards due in January 2020.

Finastra’s software-as-a-service (SaaS) RegTech solution, Instrumen-Keuangan-PSAK-71 (PSAK 71), will help Indonesian banks prepare the necessary reports for compliance.

Banks are now able to send relevant information to the data center, hosted by Praweda Ciptakarsa Informatika (Praweda), who will classify the data, perform the necessary calculations and generate the relevant accounting metrics, balance sheets and reports, using Finastra’s Fusion Risk.

Imad Abou Haidar, managing director, Asia-Pacific at Finastra said, “Indonesia’s financial services sector sits amidst a fast-evolving regulatory landscape. With regulations to enhance governance and risk management activities continuing to evolve, the introduction of PSAK 71 is just the beginning of Indonesia’s compliance journey.

“Often, smaller and medium-sized banks leave preparation late, underestimating how many tentacles IFRS 9 has and how far they reach. Our successful track record of using Fusion Risk to help clients around the world to build an IFRS 9 risk-compliant framework stands us in good stead as we support customers in Indonesia with PSAK 71.”

Finastra has also teamed up with PT Abhimata Persada (PTAP), who will provide client support servicing, and Neoflex Consulting (Neoflex), who will offer consultancy in recalibrating and building Probability of Default (PD), Loss Given Default (LD) and Exposure at Default (EAD) models to help banks in Indonesia to stay compliant in a ‘cost-effective and performance-efficient’ manner.

International Financial Reporting Standard 9 (IFRS 9), which replaces the IAS 39 standard, addresses classification and measurement, impairment methodology and hedge accounting. Despite coming into effect in some countries, others like Indonesia has delayed until 2020 to give itself more time to adjust to the stringent regulations.

Earlier this year, Jaywing, a credit risk analytics firm, formed a new partnership with Secure Trust Bank to streamline its commercial IFRS 9 processes.

AxiomSL, a provider of regulatory reporting and risk management solutions, also formed a strategic partnership with Genpact to launch an IFRS 9 solution.

While SME Development Bank Malaysia Berhad (SME Bank) chose Wolters Kluwer’s OneSumX to provide its software for managing IFRS 9.

Copyright © 2018 RegTech Analyst

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