REPUBLIKA.CO.ID, JAKARTA -- The Financial Service Authority (OJK) assessed that Indonesian banks were ready to welcome the ASEAN Economic Community (AEC) in 2015. According to OJK chairman, Muliaman D Hadad, many challenges and opportunities will certainly arise in this new economic era.

Some people may worry the AEC agreement as a threat, because of the potential of domestic market will be taken by foreign competitors.

"This is unreasonable concerns if we are able to show a high competitiveness," Hadad said on Thursday.

To enhance Indonesian banking system competitiveness, Indonesia needs a new direction of national banking system development to be more competitive and contributive. It will be the priority of national banking development.

Over the last five years, Hadad explained that national banks had recorded a higher level of interconnectivity with the industry of other sectors. Many banks have subsidiaries in financial services, like insurance. Several banks received large revenues from its subsidiaries contributing high profit to parent's company.

Interconnectivity among these sectors need attention, especially if we want to develop financial industries in this country.

ASEAN Free Trade or AEC will begin on December 31, 2015 for 12 sectors, including industrial, manufacturing, electronics, e-commerce and services. For banking sector, the implementation will begin in 2020.

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