Ian Whitehead on banking in IndonesiaIan Whitehead is the director for retail and business banking at Commonwealth Bank of Indonesia.In just three years, this executive has taken almost 200 flights within Indonesia to get to know the market and culture, bringing in previous experience from Australia, New Zealand and other countries.In our interview, he stresses the importance of investing time in relationships and learning the culture when doing business in Indonesia.

CommonWealth Bank entering Indonesia

When and why did the Commonwealth Bank decide to enter Indonesia?We entered the market in 1997 seeing that there were many useful skills and qualities that the bank possessed for this vast and growing market. In addition, we are neighbours – Australia is only four hours away.What were the biggest challenges when the Commonwealth bank came to Indonesia and how did you manage to overcome them?I think one of the challenges for any foreign company coming to a new country is understanding that markets are very different. This is the most important thing to understand for any company coming to Indonesia.There are different languages, cultures, ethnicities. Indonesia is an archipelago made up of 17’000 islands. You cannot classify Indonesia or Indonesians as one particular group of people.Anyone that comes to Indonesia needs to take time to get to know the market. Get a strong network, strong relationships and a strong local partner. Importantly get to know the local customs because it is very different to western markets.

You cannot classify Indonesia or Indonesians as one particular group of people.

Working in Indonesia as an Australian

How would you compare working in Australia and Indonesia?Australia is a beautiful country but is not growing at a rate that Indonesia is.What also strikes me is that it is such a young country. There is a clear demographic that is going to drive the economy in the future. The population shape is completely different in Australia. The malls are not as packed and it is a little slower. (smiles)What sort of preparation did you have before you started working in Indonesia?Before I came, I tried to read up on as much history as I could. The different time periods for Indonesia. I did not appreciate the complexity of languages and ethnicities.In hindsight, there are things I could have done better. I wish I had spent more time on language. I still make many mistakes but when coming to Indonesia it is important that you invest time in learning Bahasa Indonesia as well as understanding some of the cultural aspects and norms.Along with knowing geopolitical and regional issues this makes an executive more rounded when coming to a country like this.How about the company itself? Are there any preparations that should be made before entering Indonesia?We have a very good program for briefing people that come into the country on cultural issues and language, as well as history.My comment would be that it is important to spend the right amount of time investing in understanding those aspects at the beginning of your role because as soon as you get into your job you become consumed in the day-to-day activities.

Sustaining growth in banking in Indonesia

How have the results for the bank been so far?The results for the bank have been very strong. We have grown  our lending particularly in the SME and Commercial  businesses two to three times market growth over the last 12 months, as well as launching new services allowing access to banking and investments easier for Indonesians.We continue to invest back into our business. When I started, we had about 1200 staff. We now have over 2000 local Indonesia staff. We also continue to invest in our local teams going over to Australia to gain knowledge and learn. Results have been very good and we are very pleased with the progress.And how do you maintain this growth in the company?Invest in the long term. In Indonesia you have to have the right infrastructure and the right people. It is a very competitive market for good people, so it is important you continue to invest in them, the business and build the right culture.

[..] it is important to invest in regional locations and the regional teams.

So how do we maintain the trajectory of growth? First and foremost we recruit good people. We have a graduate program, which looks to hire new Indonesian graduates every year and where we can we give our existing staff opportunities to train in Australia.The second is presence. At the core of our strategy is to grow our SME business. That means we need to be in the markets where our SME’s operate. They are not always in Jakarta so it is important to invest in regional locations and the regional teams.CommonWealth Bank Indonesia

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As a business leader, how do you find working here?I love it! It is a great country and great environment. It would almost be arrogant to suggest that America or Australia would be a better working environment. They are just so different. They are in different stages of development.It is incredibly exciting here because you have a young, youthful country that has amazing opportunity and potential. Yet it has its challenges: we continue to need to invest in infrastructure, roads, railways, ports, education and telecommunication. I think these are incredibly important and foreign investors can play role here.Do locals or foreigners dominate the customer base?Our customer base would probably be over 98% local SMEs, business people and companies. Obviously, we have a few more expat customers in Bali (smiles) but generally all of our customers are IndonesiansYou talked about finding good local partners. How to find good local partners for your company?Take time and have good advisors would be my advice. The character and the relationship your partners have is also incredibly important. Take time to get to know them and your market.

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