Banknote Recirculation by Cash Handlers
APJATIN - THE INDONESIAN CASH MANAGEMENT ASSOCIATION
International Seminar – Currency Management Systems 26th – 28th September 2017, Yogyakarta
APJATIN – Who We Are
• The only Association of Cash Management Companies in Indonesia
• Established in 2008
• Currently Comprised of 27 Member Companies
• Membership is Voluntary however a number of the Largest Banks will only allow APJATIN Members to bid on Tenders
• Recognised as the Voice of the CM Industry by Banks, Insurance Companies, the National Police Force, Bank Indonesia, The Ministry of Manpower, Retailers and other related Stakeholders
• Initially the creators of a code of practice for the Industry
APJATIN – The Associations Function
• Liaise between members and;• The National Police Force
• The Banks (Our Clients)
• Insurance Companies
• The Manpower Departments/Ministry
• The Central Bank
• Keep members up to date on regulations and possible threats to or opportunities for our business sector
• Encourage members to adhere to our code of conduct
• Assist and Assess new companies that want to enter the Cash Management Business, and grant them membership once they have reached agreed upon standards and fulfilled all legal and licensing obligations
APJATIN – Members Business Functions
Cash In Transit
Cash Processing
ATM Replenishment and FLM
Cash In Safe
Second Level Maintenance
Valuable and Vulnerable Cargo
Foreign Banknote Transportation
Cash Pooling
Requirements to Become a Member of APJATIN
All Company Legal Documents in Order
Site Visit to Check on Progress on Compliance for Minimum Security Standards
Demonstrated Willingness to Follow APJATIN Code of Conduct
Shareholders and Directors checked to be in Good Standing
License from the National Police Force for The Safeguarding and Transportation of Cash and Valuable Goods
RCMC (Rupiah Cash Management Company) License from The Central Bank Consisting of 4 Categories;
1. Cash Distribution
2. Cash Processing
3. Cash in Safe
4. ATM Replenishment & Monitoring (ATM/CDM/CRM)
APJATIN – FY2016 Overall Members Profile
Cash Processing Turnover from Jan-Dec 2016
of Rp 3,583,770,633,392,030 ($269.5 Billion)27 Members
38,710
Employees
2,691 Armed
Police Officers
1,916 CIT
Vehicles
2,407 Static
Security Guards
4,098 Mobile
Security Guards
Aprox. 40,000
ATM, CDM and
CRM Covered
APJATIN – Members Cash Processing Turnover 2014 To 2016
Year Turn Over IDRUSD Equivalent
Turn Over
Increase
YoY
Number of
Cities
Operating
In
Number of
Provinces
Operating
In
2014 2,619,249,040,000,250 $196,936,018,045 - 96 26
2015 3,076,581,457,296,220 $231,321,914,082 17.5% 100 30
2016 3,583,770,633,392,030 $269,456,438,601 16.5% 103 34
Growth from;
• Additional ATM added to Bank
Networks and APJATIN members
servicing them
• Rising number of Indonesians
having bank accounts
• Salary levels growing and with
it additional disposable income
especially amongst low income
group
• 99% of transactions in
Indonesia are still cash based
ATM Growth in Indonesia
0
15.000
30.000
45.000
60.000
75.000
90.000
0
5.000
10.000
15.000
20.000
25.000
30.000
2008 2009 2010 2011 2012 2013 2014 2015 2016
Num
ber
of
ATM
s In
stalled
Top 4 Banks ATM Growth
4 Banks TOTAL BRI BNI Mandiri BCA
• ATMs installed has
averaged 24% YoY
growth since the
Financial Crisis
• BRI Averaged 44%
growth YoY of ATMs
installed since 2008
• Total ATMs installed at
the end of 2016 for
just 4 banks out of
over 120 was 77,408
Figures taken from banks Audited Annual Reports
Worldwide – 2015 SnapshotCountry Population ATMs
Ratio Population
per ATM
ATM per
100,000
Population
Population
Median Age
Population
Density per Km2GDP per Capita
(USD Nominal IMF)
India 1,390,000,000 236,000 5,890 17 27.6 402 1,723
Philipines 104,920,000 19,084 5,498 18 23.4 349 2,924
Vietnam 95,540,000 17,500 5,459 18 30.1 283 2,173
Malaysia 31,630,000 11,626 2,721 37 28.2 97 9,360
Indonesia 263,990,000 103,419 2,553 39 29.9 138 3,604
South Africa 56,770,000 27,500 2,064 48 26.8 43 5,261
China 1,410,000,000 900,000 1,567 64 37.1 144 8,113
Brazil 209,290,000 177,027 1,182 85 31.6 24 8,727
Thailand 69,040,000 63,500 1,087 92 37.2 128 5,899
EU (ex UK) 446,000,000 410,500 1,086 92 42.7 116 32,384
UK 66,180,000 70,513 939 107 40.5 271 40,096
Russia 143,990,000 168,000 857 117 39.3 8 8,929
Australia 24,450,000 31,000 789 127 38.6 3 51,850
USA 324,500,000 425,000 764 131 37.9 33 57,436
Totals from 14 Listed 4,636,300,000 2,660,669 1,743 57 33.7 69 12,168
World 6,700,000,000 3,100,000 2,161 46 30.1 54 15,800
ABOVE WORLD
AVERAGE
BELOW WORLD
AVERAGE
WORLD
AVERAGE
Cash Management CompaniesOpportunities and Challenges
OPPORTUNITIES FOR INDUSTRY IN INDOENSIA
• Incredible Growth of ATM Network
• Bank Indonesia Encourages all Banks to Use 3rd Parties to Manage their ATMs
• Less than 30% of ATMs Being Serviced by Cash Management Companies
• CDM and CDR now being a new area of growth
• ATM network transactions increasing at an even greater rate than number of ATMS
• Banking Penetration still remains low in Indonesia
Cash Management CompaniesOpportunities and Challenges
CHALLENGES FOR INDUSTRY IN INDONESIA
• With rapid expansion of business which all APJATIN members are experiencing, comes the need for additional Capital Investment and Working Capital, especially when;
• Low Margin Service Business
• High Wage Inflation
• Human Resource Development in Indonesia still needs improving
• Maintaining Service Levels and Machine Uptime whilst having to train new staff and add additional branches
• Sometimes Availability of Armed Police if during Holidays or Security Alerts
• Recent Addition of Licensing Requirement from Bank Indonesia
Challenges for Members on Complying with PBI PUJP Licensing
Standardization for PJPUR includes:
1. Building Standards
- Loading Room
- Body Searching Room
- Banknote Processing Room
- Vault Room
- Licensed for Business Use
2. Vehicle Standards
- At least 2 compartments for banknotes
and passenger
- At least 3 passenger capacity
- Size adequate to transport cash
- Body box construction has 2 door layers
for safety
- has fog lamp, toolkit, body box lighting,
and breakdown safety sign
- GPS and mobile communications
- has door lock system
- Metal Guards on windows
- Good air circulation and subject to
Indonesia Roadworthiness Standard
Challenges for Members on Complying with PBI PUJP Licensing
3. Banknote Sorting Machine Standard
- Capable to count, sort and detectthe banknote authenticity
- has 4 processed banknote pocket
- Capable to detect and sortbanknote based on BI fit/unfit anddamage standard
4. Banknote Counting Machine Standard
- Capable to count and detect counterfeit banknote
- At least 3 digits as banknote counting instruction
5. Coin Counting Machine Standard
- Capable to count coin
- Has counted coin pocket
- Capable to distinguish every coin
denomination
6. Packing Standard
- Banknotes Packing
- Coin Packing
7. Reporting to Central Bank
Before BI Regulation After BI Regulation
Code of Practice Created by APJATIN as Minimum to
Operate Cash Management
Business. As through association
and self-regulated only about 20%
of members fully complied
Created after a lot of consultation
with all stakeholders. Now
regulation that all Cash
Management Companies must
adhere to in order to stay in the
Industry
Infrastructure Members given guidelines however
have been tempted to expand
their business without sticking to
standards
All infrastructure now has to be to
BI Regulation Standards, including
Buildings, SOP, Vehicles, Sorting
Machines, Human Resources, Etc
Bank Tender Pricing Unfair as Companies not adhering
to standards had a competitive
advantage as lower COGS
compared to Companies following
Guidelines
In the Future will be fair as all
companies will have to have at
least compliant infrastructure and
the cost base should be similar
Positive Effects of Regulation by Bank Indonesia
Positive Effects of Bank Indonesia Regulating Industry
Before BI Regulation After BI Regulation
Reporting and Potential Fraud Guidelines not Followed
completely so higher chance of
fraud or theft. Reporting not
enforced and voluntary
Now must report to BI standards
Monthly, Periodically and
Incidentally. Possibility of Fraud
Greatly Reduced
Money Sorting and Counting
including Counterfeit
No standards apart from what has
been set as guidelines
Sorting of Money now checked by
BI and strictly controlled with
penalties in place for not finding
counterfeit notes
Penalties No Penalties for Non-Compliance Now Strict Penalties
Conclusion
• Although Challenging for APJATIN Members the New Regulation and Licensing will improve the Industry in the Long Run
• With such tremendous potential growth ahead of the Cash Recirculation Needs in Indonesia, the Industry needed to be more controlled and professional
• The Banks will feel more comfortable to eventually hand over their ATM and Cash Management to Third Parties
• Uptime for ATMs will continue to stay high and therefore consistently provide their much needed function in Indonesian Society
• Availability of ATMs across Indonesia for all its citizens will mean that many of the unbanked can open a bank account and enjoy the advantages of banking