What is FinTech and how has it evolved in Indonesia? Find out the explanation about FinTech in Indonesia and its development so far on this article.
Today, the development of FinTech (financial technology) in Indonesia is increasing rapidly, as proven by the emergence of many FinTech-based startup companies in the past few years. FinTech startups started to occupy a large part of the Indonesian startup industry. If you are curious about this development, check out the latest updates on FinTech development in Indonesia below.
Financial Technology (FinTech) at a Glance
Startup business in Indonesia continues to grow, one that nowadays rules is a new industry financial technology or commonly called FinTech. Aiming to facilitate the public in accessing financial products, FinTech simplifies transactions and also increases financial literacy. Potentially big startup companies dominate the organizers of FinTech in Indonesia.
In this country, FinTech has grown in various sectors, from startup payments, lending, financial planning (personal finance), retail investment, crowdfunding, remittance, financial research, and many more. Check out the development of FinTech in Indonesia that increasingly shook the business world on the next paragraphs.
What is FinTech and how has it evolved in Indonesia?
It is undeniable that digital technology in the financial sector or FinTech provides convenience for users in transacting. Thus, the business continues to evolve unceasingly.
The founding of the Association of FinTech in Indonesia (AFI) in September 2015 attracted the attention of many people in business. Aiming to provide reliable business partners to build the FinTech ecosystem in Indonesia derived from Indonesian companies, AFI has accumulated approximately 30% of all FinTech users in Indonesia. The development of FinTech is also growing from 7% in between 2006 and 2007 to 78% in 2017. The number of FinTech organizers in 2017 is 135-140 companies.
Bank Indonesia Senior Deputy Governor Mirza Adityaswara stated that based on the Statistics data, the total value of FinTech transactions in Indonesia in 2016 is estimated to reach the US $15.02 billion (Rp202.77 trillion). That number grew by 24.6% from a year earlier. In 2017, the total transaction value in the FinTech market reached the US $18.65 billion (Rp251.775 trillion).
Regarding business innovation, as more players are starting to glance at this sector, then the competition is increasingly becoming fierce. Innovation is also increasingly demanded in this regard. Large-scale e-commerce players such as Bukalapak and Tokopedia are competing to present FinTech-based products on their platforms.
Tokopedia, for example, works with many other FinTech players for capital loans, online loans, credit cards, and insurance. Bukalapak is also unbeatable in this matter. That company presents a breakthrough that is very interesting because it presents BukaReksa to motivate users to invest in mutual funds.
How can FinTech in Indonesia continue to grow?
Undoubtedly, FinTech provides convenience with extraordinary reach for those who have not reached the financial products of the bank. Also, FinTech touches the younger generation who are familiar with the internet and use it in all its needs. In fact, FinTech can also make things simpler and more efficient.
FinTech also opens new business opportunities for generation Y (Millennials) who are always actively solving problems. If no solution is found, they will build a startup business with the aim of generating solutions for the community. Furthermore, FinTech also uses data from social media. These data can be part of the risk analysis. After all, who does not use social media nowadays? It is all easy.
So, what are you waiting for? Come on and let us all take part in the development of FinTech in Indonesia right now!