SUPPLY CHAIN FINANCE AS PT BANK KARYA TBK COMPETITIVE ADVANTAGE STRATEGY

• Main Author: Bramantika, Indra
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/55747
• Institution: Institut Teknologi Bandung

The Covid-19 pandemic since the beginning of 2020 had an impact on reducing loan withdrawals and lowering the credit quality of customers in banks. Competition between banks and non-banking industry players has also increased. The impact of competition is margin pressure, which is not attractive to shareholders. Also, banks do not have sufficient capital allocation for investment in future business development. Facing fierce competition, banks generally focus on maintaining debtors' credit quality and seeking sustainable low-cost funds. The same strategy goes for Karya Bank. Karya Bank needs to find new, high-quality and sustainable loan assets. At the same time, Karya Bank must also look for cheaper funding sources to maintain a competitive advantage in pricing and maintain shareholder profitability. Considering the available resources and capabilities of Karya Bank, it is necessary to seek high-quality assets and low-cost funding sources as efficiently as possible. If Karya Bank’s management uses new resources or functions, it may require a lot of funds and longer processing time. In this paper, the Author will conduct research related to business strategy for Karya Bank to obtain a sustainable competitive advantage by leveraging its resources and capabilities using the Supply Chain Finance framework. Supply Chain Finance uses transaction information and cash flow between buyers and suppliers in the business community to provide financial solutions and methods to reduce risks to optimize each business community member's working capital and liquidity needs. This paper is descriptive research that will be developed using primary data to gain enough information as tools for analysis. The primary data collection relies on a qualitative method conducted through one-on-one in-depth interviews with the relevant stakeholders of Karya Bank. There were seven people to be interviewed as a source of primary qualitative data. These interviewees came from the Corporate Banking and SME Banking divisions, the two divisions that first implemented the Supply Chain Finance strategy at Karya Bank. Based on the results of the Author's interviews and observations, which were then processed using a SWOT – TOWS analysis approach, it is obtained that Karya Bank offers the Supply Chain Finance (SCF) framework from the upstream and downstream of a business community to maximize the transaction information and funds flow at Karya Bank. This SCF framework applied by Karya Bank is different from what other banks/competitors do because it comes from the utilization of Karya Bank's resources and capabilities to be the competitive advantages, such as: • Serve the entire market segment available in Indonesia. • Access to numerous large corporate Debtors in the Bank's portfolio. • Experienced people in the SCF field who can easily understand the customer or business community's needs. • Service coverage is widespread throughout Indonesia and supported by digital technology for branchless banking. • A web-based Financial Supply Chain Management (FSCM) application to process a high-volume transaction such as loan disbursement, payment, and reporting. • Global presence via Global Banking Group can provide access to the Multinational Corporations. • Complete variety of funding and cash management products for the retail to corporate segments.