Why Does Indonesia Need Fintech Revolution?

Why Does Indonesia Need Fintech Revolution?

Fintech revolution is what Indonesia need now to boost its economy. Here’s why.

Indonesia is a country with rising potentials in digital business, yet it still needs a boost in developing potentials in fintech. Despite the popularity of online shopping and rising new startup trends, many Indonesians still use traditional means to shop.



The online payment system is still used by the majority as a personal financial option, not a common transaction method in various life aspects.



The Indonesian government has a goal to increase digitalization in various socio-economic aspects in 2020. Therefore, fintech revolution is necessary to obtain the goal.




Reasons Indonesia is Ready for Fintech Revolution

Fintech revolution is important for the country that has fast growth of the digital economy. Various studies have predicted digital booming in 2020’s Indonesia, especially with numerous new startups and digital SMBs that are popping up. Financial technology, especially related to the online transaction, is important to support this growth. This trend is also supported by “smart city” trend, which has been initiated in several provinces.


Indonesia has several key potentials in welcoming fintech revolution, such as:

  • Large internet user population

Indonesians are among the biggest internet users in Asia. The population numbers are more than 270 million, and around 100 million are internet users. Add the fact that the newer generations are exposed early to the internet, and fintech business owners or investors get a lot of potential customers in fintech services.



  • Huge potentials in localized business

“Going local” is something that all business owners must remember in Indonesia. The country’s digital-savvy populations are known for using internet and crowdfunding sites to support local causes or fulfill their lifestyles in more efficient ways. Startups such as KitaBisa (crowdfunding website) and Go-Jek (ridesharing and delivery service) have proven that local solutions are often more preferred.



  • Huge numbers of mobile phone users

The mobile phone is an important device in the world of fintech service. Indonesians are among the biggest users of mobile phones in Asia. Cheap smartphones are available in big cities, small towns, and even villages. This can create a large target market for fintech solution providers.


Security is a thing that often stops people to adopt cashless payment system. Indonesian financial institutions such as BI and OJK have formed new regulations regarding fintech company registration and licensing. The Indonesian government has also started to create more leniency for foreign investors to come and boost the country’s digital industry.




Challenges in Fintech Revolution

Despite the potentials, Indonesia also faces challenges in realizing the fintech revolution. Less than 10 percent of Indonesian adults have credit cards, compelling the companies to make creative payment methods to accommodate them in practical ways. Lack of fast internet signal in many areas also makes online transactions less practical for many people.



Indonesia also needs to prepare for battle against cyberthreats. The country has been a little slow in adopting security measures for online transactions, reducing the people’s trust in using fintech products. Indonesia’s currency, Rupiah, also has a history of fluctuations. Combined with high bank rates and economic uncertainties, and this presents a huge challenge for fintech companies to find strong feet.



Revolution of financial technology in Indonesia is possible with various supporting factors. However, the country needs to deal with several challenges to welcome the new era.

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