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Digital Banking Talks with Arwin Rasyid

Arwin Rasyid
Digital Banking Talks with Arwin Rasyid

Born and bred in Europe, Arwin Rasyid recalls his early struggles with the Indonesian language as a teenager.

The young man grew up to be one of Indonesia’s prominent bankers, with a career that has spanned over 35 years. Rasyid shares how digital banking is toppling traditional banking’s long-established precedence, his latest financial projects, and his penchant for gelato which led to the birth of another exciting business venture.

Good afternoon, Arwin! Could you please tell us a little bit about your banking journey?

As you know, I’m a retired banker now. My banking journey started in 1980 at The Bank of America, before moving to Niaga Bank in ’86 until ’97. Unfortunately, Niaga was taken over by the government during the ’97 financial crisis, as many banks were back then. I moved to IBRA (Indonesian Bank Restructuring Agency), and then to Bank Danamon until its divestment to Temasek in 2003. I then pursued BNI for a few years as the Vice CEO.

Then came this interesting shift in my career when I became the CEO of Telkom Indonesia. I just had this desire to be posted outside of banking. I returned to the banking realm in 2008 at CIMB Niaga, where I ended my tenure and concluded my banking journey in 2015 as CEO.

As the son of a renowned diplomat, you spent many years abroad before settling in Indonesia. Did that make you feel like an expat in your own country?

I was born in Rome and raised in Italy, Switzerland, and Singapore. At our home, my family spoke English and the Minangkabau language. When we relocated to Indonesia, I mistook the Minangkabau language as the national language when in reality, it’s a dialect spoken by West Sumatrans.

In Jakarta, I went to The Gandhi Memorial School, an international school with an Indian curriculum. The language impeded me at first, however, I gradually picked it up. I somehow always felt like an expat in any given country. In Switzerland, I felt like the odd-looking one for having brown skin. In Singapore, where the Chinese constitute a majority of the population, I had brown skin. In Indonesia, where I finally looked like a local, I had this difficulty speaking the national language. I find this to be hilarious at times. That being said, I still think in English.

If the situation were to happen today, do you think children who migrate to Indonesia would face difficulties as such?

I don’t think so. I believe that technological advances and the prevalence of international schools have made it easier for them to learn languages and adapt. I’ve seen many Indonesian youngsters speak wonderful English with impeccable accents. Some of them have never even travelled abroad. It’s amazing how the internet and technology have transformed society.

Could you please tell us about your latest venture, TEZ Capital?

I started TEZ after my retirement in 2016. Our focus has been commercial lending. As a banker, I found banking rules to be rigid and bureaucratic at times. For instance, banks are unlikely to offer a company or a particular institution a loan when they are less than three years old, due to a lack of track record. This certainly doesn’t imply that the company is not profitable, it’s simply how the policy works. As long as I feel comfortable with the company’s owners and its working culture, I would be happy to offer them a loan given that they meet our lending criteria. I had visualised this at some point in my banking career, and I’m glad I was able to execute it. Having my own company allows the rules to be more flexible and agile. We provide short-term, bridging loans. Our market has mostly been medium-sized companies, including Singapore-based Indonesian business owners.

How do you find the digital banking market in Indonesia?

Digital banking undeniably offers more convenience and comfort compared to traditional banking. Digital banking first took off when we had a 3G connection in Indonesia. As you know, the internet connection catalyses information exchange. It’s amazing to think how some of us even have access to a 5G connection now. Developing countries often enjoy the latest technological advancements. Digital banking has made it possible to transfer large sums of money without even having to move out of your chair. One of the most notable developments is shopping malls and retailers with QR facilities. You can easily scan the QR code to pay via various digital money platforms. It’s also possible to scan the code to transfer money via mobile banking to the seller.

Does this mean that we are simply ahead of other developed countries when it comes to digital banking?

As the fourth most populated country in the world, Indonesia has a high internet penetration rate and a high number of social media users. In the rule of investment, there’s something called a payback period. It wouldn’t make sense to spend money on a particular technology to only replace it with a newer version in a year or two. The latest markets, mostly developing countries, have better access to a newer version of the technology. This certainly doesn’t imply that developed countries lag. I once asked a friend who runs a movie business why Indonesia has earlier access to Hollywood films compared to Singapore. While Singapore has a much higher GDP, Indonesia is a more feasible market with 50 times the population of Singapore. Indonesia has more cinemas and therefore, a higher number of viewers.

What are your thoughts on cryptocurrency?

I think it’s amazing. Blockchain provides perfect security that in no way is the transaction able to be tampered with. We saw how crypto went from a few hundred dollars to US$7,000 in 2018, all the way to US$60,000 in 2020, only to plummet to below US$40,000 now. Naturally, prices go up with more demand, and vice versa. At times, I still wonder about the valuation, especially when it comes to NFTs. I’m aware that when a particular work of art is registered, it becomes unique to one’s own creation and has a special identity. However, I wonder about the specific valuation measures – how much is a work of art valued? I’m not sure whether or not this is a phase. I think it’s early days; we don’t know what we don’t know.

Any investment ideas for expats?

To some extent, Indonesia could be a haven for investment. There was a time in the early 2010s when the country enjoyed the highest property boom in the world. Prices would increase by 15 percent every quarter of the year, and about 60 percent a year. This is mostly attributed to the burgeoning middle-class and the limited amount of housing. The new Omnibus Laws have also eased foreign property ownership. However, expect fruition in two to five years; it won’t give you direct results.

Another interesting sector would be government bonds. The Rupiah has been quite steady for some time now. If you buy money market funds, Indonesian or government bonds, the yield would be much higher compared to that of Singapore or US dollars. Assuming the Rupiah remains steady, of course. You certainly don’t wish to sell your dollars to buy rupiah to only watch it depreciate. Indonesia is also home to many start-ups, with some going public with their IPOs – Tokopedia, Bukalapak, and many more.

Tell us about your gelato business.

I’m an avid gelato lover! My love for it has led to the birth of Romano Gelato. I run the business with my daughter so I mostly supervise it. We have unveiled our stores in Pacific Place, Jakarta and recently at Beachwalk Mall, Bali.

We offer authentic Italian Gelato. All ingredients have been imported and the chef is Italian. As it is a local brand without franchise and royalties, the prices are pretty competitive. My personal favourites are pistachio and coco rocher! This is my second culinary venture after Simpang Raya, a West Sumatran Restaurant in Manggarai, South Jakarta.

After retirement, what does your typical day look like?

I’m 65 now and I don’t know how many more years I have left. I started as an academic and I feel privileged to still be able to share my knowledge as a guest lecturer at various events for leadership, banking, and managing changes in the corporate world. My academic papers are available on my website, I’ve also authored three books about Danamon, TELKOM, and CIMB respectively.

I believe that an active life is a key to a happy life – even machines rust without regular use. I try my best to stay fit too. I’m a golf fan and I enjoy going for walks. Moderation is the key to everything. As a devotee of red meat and gelato, my love for food persists, yet I continuously keep track of my cholesterol levels. I also try my best to help the unfortunate with philanthropy, often by distributing food boxes. At the end of the day, social work nurtures your soul.

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