Asbanda Chairman Emphasizes KUB is Not Only Capital, but IT and Human Capital Synergy

JAKARTA - Chairman of the Association of Regional Development Banks (Asbanda) Agus H Widodo emphasized that the Bank Business Group (KUB) is not merely a vehicle for fulfilling banking capital regulations.

According to Agus, the existence of KUB must be seen as a long-term collaboration platform between Regional Development Banks (BPD) to create mutual efficiency, especially in the development of information technology and Human Resources (HR).

"This KUB is a good collaboration platform, not just in terms of capital fulfillment. But in the early stages, because this is also new, yes, this KUB, in the early stages, what must be built is the fundamentals of the KUB itself. What is it? Governance, risk management, about the system, about cyber security, about people, and so on," said Agus in a press release, Wednesday, August 5.

Agus said that in the short term, the target of the establishment of KUB is not merely to pursue business volume and profits.

The main point to be achieved first is to equalize and strengthen the fundamental standards among member banks.

This collaboration is considered very important for BPD in the region because efficiency is the main key in facing the current banking industry challenges.

"So earlier it was not just a fulfillment of the fulfillment requirements but to build a technology that was also like it was not. Yes. Building a superior human resources is also not. Yes. So if it is done together, it can be efficient. Okay. That's what makes collaboration or you are free to exist," said Agus.

Through the KUB platform, BPD can share technology platforms and conduct joint human capital training programs.

This is considered to be able to reduce the cost of digital infrastructure investment which is relatively expensive if borne independently by each regional bank.

Despite having great potential, Agus did not deny that there were a number of challenges in building KUB collaboration between BPD.

The first challenge lies in the differences in vision and interests among shareholders. Second, the readiness of capital, technology, and quality of human resources is not even.

The third challenge is the emergence of concerns from the BPD members regarding the potential loss of the identity of regional banks when collaborating.

Meanwhile, the fourth challenge is in determining the division of operational costs (cost sharing) at the beginning of the formation.

Therefore, Agus emphasized the importance of establishing standard governance and the completion of early-stage joint projects in order to create value creation before moving on to a wider collaboration scheme.