Bank Central Asia (BCA) rose to the top in the Indonesian banking industry largely due to its customer-centric approach, strong asset and liability management capability, and unwavering focus on building strong relationships. BCA was recognised as the Bank of the Year in Asia Pacific at The Asian Banker Future of Finance Summit held in Thailand in June. Jahja Setiaatmadja, president director of BCA, was named CEO of the Year in Asia Pacific.

Under Setiaatmadja’s leadership, BCA’s market capitalisation grew a compound annual rate of over 44% over the past two years to reach a high of IDR1,119 trillion ($79.8 billion) at the end of April 2023. The bank is not only the largest listed company in Indonesia but also the largest bank in Southeast Asia by market capitalisation (DBS Bank, the region’s largest bank by asset, saw its market capitalisation hit a high of $63.7 billion in the same period).

BCA achieved strong financial ratios by international standards. A cost-to-income ratio of 32.5%, and efficient operational management contributed to a record profit growth of 29.6% to $2.9 billion and return on equity (ROE) of 21.7% which are among the highest in Indonesia and Southeast Asia. The bank’s strategic focus on stable funding through retail channels led to 5.7% year-on-year growth in CASA, accounting for 81.2% of total third-party funds. This emphasis on sticky-retail CASA provided a reliable and low-cost source of funds, supporting financial resilience and profitability with a healthy 65% loan-to-deposit ratio.

BCA’s story is intertwined with the transformation of Indonesia itself. Setiaatmadja, who has been with the bank since 1990, witnessed firsthand the challenges posed by the Asian financial crisis; BCA not only weathered the storm but emerged as a leader in the industry.

One of the key elements of the bank’s success lies in its strong grasp of the fundamental asset and liability management of the banking business, and its ability to adapt to changing customer expectations and market dynamics. BCA realised that banking is no longer just about intermediating savings and credit but about facilitating transactions and providing superior payment capabilities and services. By transforming savings accounts into transactional accounts, the bank tapped into a growing base of merchants and customers who were primed for the digital revolution.

The bank’s commitment to digital banking is evident in its early adoption of internet banking and mobile banking services. However, what truly sets this bank apart is its dedication to customer education. While many digital banks cater primarily to millennials, BCA’s customer base spans in age from 17 to 95 years old. Recognising the need to support customers unfamiliar with digital banking, the bank has a 24-hour call centre with 4,000 dedicated staff members providing assistance, education and support.

The results of BCA’s digital transformation are impressive. Today, a staggering 99.7% of transactions occur outside of branches, with customers opting for digital channels such as mobile banking and internet banking. This shift has not only driven convenience and efficiency but has also allowed the bank to reduce costs and offer highly competitive loan products.

Maintaining strong relationships with customers remains a core principle at BCA. Setiaatmadja believes that while technology plays a crucial role in modern banking, it cannot replace the personal touch. For larger depositors, the assurance of a trusted relationship is paramount. By providing personalised support and assistance, BCA ensures that customers feel valued and looked after, regardless of the amount they deposit.

BCA’s success is further underpinned by the resilience of Indonesia’s economy. With ample liquidity and inflation under control, the country provides a conducive environment for growth. The bank’s market capitalisation has surpassed that of larger Singapore banks, making it the best-capitalised bank in Southeast Asia. BCA’s transparency, commitment to delivering on targets, and investor-focused approach have attracted both domestic and foreign investors.

Looking ahead, BCA aims to continue on its growth trajectory by leveraging digital innovation while upholding the importance of building and nurturing customer relationships. Setiaatmadja emphasises the balance between digital and relationship banking. While technology enhances efficiency, the foundation of the banking business is built on trust and human interaction.

Read Jahja Setiaatmadja’s and BCA’s CEO of the Year and Bank of the Year in Asia Pacific press release here.