MANAGING DIGITAL ORGANIZATION

”BANKING VS COVID-19”

Ariella Felita Vashti

DIGITAL BUSINESS

UNIVERSITAS PADJADJARAN INDONESIA

Electronic copy available at: https://ssrn.com/abstract=3591224

 ABSTRACT

At the end of 2019, the world community was shocked by the spreading of an

unknown virus from China. This virus was finally named COVID-19 and was

categorized as a pandemic by WHO (World Health Organization). Of course,

COVID-19 has an impact on many sectors, one of the sector is economy. As a

result of this virus, the world economy is weakening and this is also greatly felt by

Indonesia. The sector which is dealing directly with the impact of this virus is the

banking sector. With the current conditions, the banking sector must adjust to

survive even in the toughest condition. Fortunately, these days technologies are

supportive and very useful. Although in this condition we must stay in home and

work from home, we can still do what we must using these days technologies.

Banking sector must adaptive with current conditions and technology nowadays in

order to survive. Although COVID-19 bring many negative impacts, there are still

positive impact. In the future, there are more people that understand technologies

and technologies is used by many people that can make any of activity more

effective and efficient.

Electronic copy available at: https://ssrn.com/abstract=3591224

 At the end of 2019 the world was shocked by an unknown virus from the

city of Wuhan, Hubei, China. This virus was finally named COVID-19 and was

officially categorized as a pandemic by WHO (World Health Organization)

because of its uncontrolled spread and spread throughout the world. Until now,

COVID-19 has spread to 184 countries with around 1.5 million people infected

and 95 thousand deaths worldwide. While in Indonesia, 3,293 people have been

infected and 280 of them died. Here is a graphic showing the spread of this virus

from January to now according to the Center for Systems Science and

Engineering (CSSE)

The graph shows the spread of the COVID-19 which is still wide and the curves

have not yet sloped. Of course, due to this pandemic, there are many impacts on

all sectors such as education, economy, social, and others. Because the

distribution of the pandemic is not controlled, several countries have implemented

a lockdown system that causes people to stay at home and may leave if there is an

urgent need. This has a big impact, for example the weakening world economy. In

Indonesia too. Although there is no government policy for lockdown, the

Electronic copy available at: https://ssrn.com/abstract=3591224

government has announced that people must stay at home and work from home.

For example, in the education sector, lectures held online through many

application (in the network). So even with workers.

This pandemic has an impact on all sectors, one of the sector is the

economy. The world economy is weakening. This will certainly have an impact

on the Indonesian economy. According to the Indonesian Minister of Finance, Sri

Mulyani, current conditions could cause a decrease in household consumption by

3.2% to 1.2% and investment would decrease. This could cause economic growth

decrease to 2.3% and could reach -0.4% (based on BI, OJK, and LPS

assessments). The exchange rate of rupiah against dollar is also expected to

weaken to Rp20,000 per US dollar. According to the Governor of Bank Indonesia,

Perry Warjiyo, the weakening of the rupiah was caused by investors panicking,

causing a capital outflow. During the period of this pandemic between January

and March 2020 there was a capital outflow in Indonesia's investment portfolio,

which amounted to Rp167.9 trillion. Then, with the current state of the Indonesian

economy, what about the health of banks in Indonesia?

Electronic copy available at: https://ssrn.com/abstract=3591224

 According to the LPS (Lembaga Penjamin Simpanan) there are eight

banks that enter the criteria of not being strong in facing rapid economic changes

because COVID-19 based on stress tests or simulations on Indonesian banks face

the toughest conditions of the Corona Virus pandemic. In this 4.0 revolution era, a

company should be dynamic because the external environment is very unstable

and can change at any time. Companies must be dynamic in order to survive. The

Chairman of the OJK Board of Commissioners, Wimboh, said that some business

sectors that have become debtors have been seen as unable to pay their interest or

principal loan installments because they have been affected by the corona virus. If

the company does not get revenue, it will affect the profits generated, capital, and

ultimately to solvency. Therefore, during this pandemic it must be more stringent

in approving borrowers. As a result of this pandemic that requires us to stay at

home, we often use digital services. Internet banking and mobile banking services

will often be used. Therefore, banks must maximize their services on internet

banking and mobile banking. This is evidenced by data obtained from BCA,

Electronic copy available at: https://ssrn.com/abstract=3591224

recorded 98% of BCA customer transactions have used digital banking services.

The growth of transactions using BCA mobile last year reached 99.2% on an

annual basis. While internet banking transactions grew 10.8%

In response to the COVID-19, Bank Indonesia did not remain silent.

Bank Indonesia made several policies to deal with this pandemic. These policies

include reducing interest rates to support the momentum of economic recovery,

increasing the intensity of interventions in the market to stabilize the Rupiah

exchange rate, expanding instruments and transactions on the money market to

encourage foreign investors to more hedge against Rupiah exchange rate risk,

increase injection liquidity on the money market and banking in order to

encourage financing for the business world and the economy, and, easing back

macro prudential policies to encourage banks in financing the business and

economic world. With this policy, banks must respond properly, in accordance

with the policies that have been issued. As a result of this pandemic, companies

must also obey government policies, namely work from home. Employees must

become flexible to working in virtual teams. So, in conclusion, with the COVID-

19 outbreak this presents new challenges for Indonesia, especially in the economic

and banking sectors. The challenge is how banking health remains good during

the COVID-19 outbreak. Even though the situation is unstable, the company must

be able to dynamically follow the current situation. The negative impact caused

by this outbreak does look very clear. But in my opinion, there are still positive

impacts. The positive impact is digitalization will progress. With a government

policy that caused people work from home, people will get used to working with

Electronic copy available at: https://ssrn.com/abstract=3591224

virtual teams and the society will be more understanding of technology.

Companies can also learn from current conditions to be more dynamic in the

future. In addition, manual origin processes will be replaced by digital processes

because with this outbreak, all processes are carried out digitally. Finally, we do

not know when the COVID-19 outbreak will end, but we must try to survive in

conditions beyond our control.

Referensi

(n.d.). Retrieved from 1 hingga 3 Bulan Mendatang Dampak Corona ke Likuiditas

Bank Akan Terlihat:

https://finansial.bisnis.com/read/20200406/90/1223158/ojk-1-hingga-3-

bulan-mendatang-dampak-corona-ke-likuiditas-bank-akan-terlihat

(n.d.). Retrieved from Coronavirus COVID-19 Global Cases:

https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda75

94740fd40299423467b48e9ecf6

Liputan 6. (n.d.). Retrieved from 8 Bank Berpotensi Gagal Bertahan dari

Serangan Virus Corona:

https://www.liputan6.com/bisnis/read/4224022/lps-8-bank-berpotensi-

gagal-bertahan-dari-serangan-virus-corona

Tirto.id. (n.d.). Retrieved from Ketika Covid 19 Menghantam Sektor Bank di

Berbagai Negara: https://tirto.id/ketika-corona-covid-19-menghantam-

sektor-bank-di-berbagai-negara-eE1H

Electronic copy available at: https://ssrn.com/abstract=3591224

VOA Indonesia. (n.d.). Retrieved from https://www.voaindonesia.com/a/menkeu-

dampak-covid-19-pertumbuhan-ekonomi-indonesia-2020-bisa-minus-0-4-

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Electronic copy available at: https://ssrn.com/abstract=3591224