Indonesian financial institutions have enjoyed successive periods of high growth and high profitability. Margins in the banking sector have been higher than ASEAN peers and new customers have been eager to access new products.
However, the elements of a “Perfect Storm” are all coming together and putting significant pressure on profitability, namely:


  • Shrinking margins as competition increases and customers become more sophisticated buyers
  • Rising costs, particularly employee compensation
  • A marked increase in NPLs
  • Exchange rate volatility putting stress on both financial institutions and their customers
  • Increasingly costly customer acquisition channels
  • Many institutions with poor cost-income ratios who lack overall scale

Despite the above, the long-term opportunity in Indonesia remains high. Now more than ever it is critical for institutions to have a Fit-for-Growth strategy and an action plan to cut costs and improve efficiency in a way that allows for future growth.

Firms are therefore looking at how to re-engineer their business in a way that can deliver lasting savings and sustainable improvements in operational efficiency. We are helping leading financial institutions to do exactly this, using a differentiated approach to cost analysis that allows management and stakeholders to understand fully the product, customer and segment profitability considerations of each cost decision.

PwC has a team of dedicated financial services cost management and performance improvement specialists who can help your organisation to gain the edge in efficiency and cost competitive delivery, namely:

  • Process architecture and optimisation, operational transformation of finance, IT, HR, and operation functions in banking and insurance business lines, as well as corporate levels
  • Cost cutting and cost optimisation within a “Fit for Growth” strategy
  • Employee benefits and compensation programmes
  • Cultural Change
  • Downsizings and carve-outs

Contact us

Follow PwC Indonesia