Fintech (short for financial technology) is a relatively new global industry that uses technology to improve various activities in the finance sector. For example, smartphones allow for easy mobile banking, while investing services or cryptocurrency are examples of technologies that aim at making financial services more accessible to the general public. Fintech startups have actually been booming rapidly in recent years, making traditional players (most notably: banks) somewhat nervous (and forcing these traditional players to apply new technology into their own business models).
Kuseryansyah, the Executive Chairman of the Indonesian Financial Technology Association (Aftech), expects five fintech sectors in Indonesia to experience significant growth in the next five years amid rapidly rising smartphone and Internet penetration in Southeast Asia’s largest economy. These five fintech sectors are:
(1) Online payment
(2) Peer-to-peer (P2P) lending
(3) Insurance technology (insurtech)
(5) Price aggregators
Go-Pay and OVO are two examples of very successful online payments platforms in Indonesia. Meanwhile, P2P lending services also have great potential for further growth as they offer easily accessible small loans in a country where less than 40 percent of the population is banked. Data from Indonesia’s Financial Services Authority (in Indonesian: Otoritas Jasa Keuangan, or OJK) show that this year P2P lenders distributed a total of IDR 11.7 trillion (approx. USD $812 million) up to August. This figure is expected to increase further to IDR 18 trillion (approx. USD $1.2 billion) at the end of the year.
This articles discusses:
• the presence of illegal players in Indonesia's fintech industry
• the risks that are involved when having illegal players active in the market
• government efforts to combat illegal players
Read the full article in the November 2018 edition of our monthly research report. You can purchase this report by sending an email to firstname.lastname@example.org or a WhatsApp message to the following number: +62(0)8788.410.6944