IMPROVEMENT OF RISK MANAGEMENT FRAMEWORK IMPLEMENTATION IN AGENT BANKING BUSINESS AT PT. BANK KLM

• Main Author: Prihatmanti, Windhi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53414
• Institution: Institut Teknologi Bandung

The financial services business through agents carried out by the financial industry, especially banks, is regulated in terms of regulations issued by both the Financial Services Authority and Bank Indonesia. KLM Bank is one of the banks that has chosen to do Laku Pandai services and uses an agent as an extension of the Bank's arm to serve customers, especially in remote areas of the village. Following the vision and mission of KLM Bank, to become a bank that provides financial inclusion services, business through agents is essential. Since the launch of the Laku Pandai program, along with its development, it is known that the continuity of this business can not only be seen from one side but also must consider the risks, also return to regulatory regulations as well that Banks are required to implement risk management in each of their business lines. Based on the qualitative exploration of the literature related to banking agents, as well as the identification of internal conditions, it is known that the KLM Bank does not yet have a complete implementation of risk management. From various literature on risk management implementation, the ISO 30001: 2018 framework can be used with the limitations for this research, which is used in the risk identification, risk analysis, and risk evaluation sections. This framework is used to identify inherent risks with a different approach than the regulator's risk management framework. This framework provides flexibility to carry out its implementation and implementation. The KLM Bank will start by building an Assurance organization that will continuously monitor and review all risks that exist at present, or in the future, on the Agent business carried out at the KLM Bank. This research focuses on identifying a risk management implementation process and mechanism that can be done in the agent business at KLM Bank. Identifying inherent risk from the agent's business is carried out by obtaining various references and exploring its internal KLM Bank condition. Agent business is exposed to strategic risk, regulatory risk, operational risk, reputation risk, legal risk, and other specific risks, including financial risk, fraud risk, partnership risk, and technology risk. The nine risks are then analyzed and represent risks explicitly treated in the agent business model. The risk identification process is then continued by analyzing the internal KLM Bank conditions, which can then be compiled the implications by creating a risk register. This study's results are that implementing a risk management framework is carried out by creating a risk register, making early warnings in the form of Key Risk Indicators related to internal business conditions, and developing an Assurance mechanism for further monitoring. The implementation of this research will be continued by applying the risk identification process and its analysis by measuring it with a systematic assessment process that will be carried out through the assurance process. The implementation method is expected to help KLM Bank conduct a more strategic evaluation of the Agent's business. Apart from that, from this research, there are also recommendations given to the Internal Risk Management of the KLM Bank to carry out risk identification by referring to the regulator's guidelines and exploring other literature. Furthermore, for regulators, it is hoped that the Agent appointed to become the Bank's arm must also be protected by good rules and regulations so that they can continue to work together and generate profitability for the Bank and the life of the Agent itself in running its business with the Bank.