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risk management

The Company implements a risk management system that aims to identify, anticipate, and formulate correct measures for risk mitigation, covering every type of risk that the Company may face in the course of doing business. This risk management system is of utmost importance in protecting the interests and assets of the stakeholders, and is a manifestation of GCG implementation within the Company. The Company’s risk management practices have been implemented in each of the Company’s business conduct codicils. Each work unit in the Company has the proper procedures and general guidelines for the implementation of the risk management system, to be carried out in order to safeguard Company interests and assets.

Risk Profile

The risks faced by the Company and the mitigation measures conducted are described as follows.

  • Competition Risk

Players in technology sectors tend to be quite fragmented. Main competitive risks will come from the entrance of global-scale players with leadership in technology innovation and with huge capital backup. To mitigate this risk, The Company enacts a “sharing economy” concept, concluding strategic alliances with major groups in various sectors to defend Indonesian markets.


  • Technology Risk

Technology development is progressing at a blinding pace. Disruptions in many sectors, namely in telecommunication, finance, retail and transportation, all threaten the very existence of incumbent players, causing some to even close down their business. To mitigate this risk, The Company and its subsidiaries established research as well as business development divisions to enlighten management as to key product and consumer behavior trends in the next 3-5 years. Hence, the Company will ideally always be ahead of the curve in technology development in the market.


  • Government Regulatory Risks

As a public company, the Company is guided by the regulations, such as regulations issued by Financial Services Authority, the government body appointed to regulate and supervise the capital market activities, as well as relevant regulations related to or derived from the Capital Market Law, also regulations issued by Bank Indonesia and others government regulation which may affect the Company’s business in technology and digital, such as regulations on digital payment. To mitigate this risk, The Company’s legal division, assisted by the internal audit and external audit teams, always maintains close relationships so that the regulators can take every appropriate action in accordance with applicable laws and regulations.

  • Risk of Workforce

As a technology company, its employees comprise the most valuable assets of a company, and likewise, overall Company performance is highly influenced by the turnover rate of employees. To mitigate this risk, The Company manages the risk of workforce turnover, among others through its employee retention program, application of an incentive and reward system, and provision of opportunities to all employees to follow a clearly defined career path.

  • Credit Risk

Credit risk is the risk that a third party failed to discharge its obligation based on a financial instrument or customer contract, which will incur a financial loss. The Company is exposed to credit risk arising from its operating activities and from its financing activities, including deposits with banks, foreign exchange transactions, and other financial instruments. Credit risk arises mainly from banks and cash equivalents, trade receivables, other receivables and restricted time deposits. And Credit risk arises from trade receivables and other receivables managed by the management of the Company in accordance with the policies, procedures, and control of the Company relating to customer credit risk management and other receivables. Credit limits are determined for all customers based on internal assessment criteria. The receivables are monitored regularly by the management of the Company. Credit risk also arises from banks and deposits with banks and financial institutions.

To mitigate this risk, The Company places banks and cash equivalents in trusted financial institutions. In addition, the Company maintains business relationships with recognized and credible parties, and continuously monitors the amount of receivables to reduce the risk of impairment of receivables.

Overview of the Effectiveness of the Risk Management System
The Company continuously evaluates the effectiveness of the risk management system regularly as part of implementing the internal control function. It ensures that risk management has been carried out effectively and by sustainability principles.


Statement of the Board of Directors and/or Board of Commissioners on the Adequacy of the Risk Management System

The Board of Commissioners and the Board of Directors evaluate and assess the adequacy of the risk management system on a regular basis. Based on an evaluation held at the end of 2022, it was concluded that the risk management system implemented by the Company operates well and effectively, as indicated by the low level of risk faced by the Company and the absence of a significant effect of these risks on financial and operational performance.

Material Cases and Administrative Sanctions
In 2022, the Company did not receive any administrative sanctions from the Financial Services Authority, Indonesia Stock Exchange, or other authorities.

*Source: PT M Cash Integrasi Tbk. Annual Report 2022

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