FINTECH UPRISING IN INDONESIA

2016

FINTECH UPRISING IN INDONESIA 2016

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A. FINTECH OVERVIEW IN INDONESIA• In Indonesia, penetration of Bank Account

Ownership only 36%. Even among those who havebank accounts, only nine percent (9%) use onlinebanking & mobile banking and a sparse six percent(6%) have credit cards. This means that cash is stillthe main payment method for Indonesia.

• Otoritas Jasa Keuangan (OJK) together with KamarDagang Indonesia (KADIN), FinTech Associationand Bank Indonesia, preparing regulation forFinTech Startup hopefully to finished by the end of2016.

• Around 71 FinTech already running in Indonesiaaccording OJK report, but only 27 startupregistered.

3FINTECH UPRISING IN INDONESIA

96%

78%

53%

36%31%

62%

54%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Malaysia Thailand India Indonesia Vietnam World Developing

Countries

Source : CIMB-Principal Asset Management, Weekly Indo Perspective

B. FINTECH SUPPORTING INSTITUTION

A new regulator was introduced in December 2013, called the Otoritas JasaKeuangan (OJK). OJK was formed to complement Bank Indonesia, the centralbank, with a focus on additional areas such as FinTech. With the formation of OJK,segments such as digital wallets and P2P payments are garnering more support andattention.

4FINTECH UPRISING IN INDONESIA

FinTech was launched as a collaboration between FinTech startups and bankingcorporations in the country. The aim is to provide a platform for players andstakeholders (financial and non-financial) within the FinTech space, to facilitateconstructive and inclusive discussions and strengthen the FinTech ecosystem in theotherwise fragmented nation. Bareksa.com, CekAja.com, DOKU, Kartuku, m-sakuand Veritrans registered as startup company who initiate Indonesian FinTechAssociation In September 2015.

Chamber of Commerce and Industry or Kamar Dagang Indonesia (Kadin) isorganization for businessman and entrepreneur. They have role to help mentorshipand sharing knowledge among people within organization. Kadin also supportingFinTech to help increase efficiency on business process in Indonesia. They took partas commission team for planning FinTech regulation together with OJK and FinTechIndonesia Association.

3. INTERNET AND DEVICE USER

The rapid growth of the middle class isgenerally a phenomenon in developingcountries. The growth of the middle class isdriven by a good education, high employmentopportunities, and good purchasing power sothat their consumption activity is also good. Theaverage middle class in Indonesia expressthemselves through their consumptionactivities, especially in tech products.

From the graph in addition, in 2018 predictedthat smartphone users will increase by 103million people and by 2013 are likely toincrease.

27.4

38.3

52.2

69.4

86.6

103

0

20

40

60

80

100

120

2013 2014 2015 2016 2017 2018

Mill

ion

Years

Monthly Active Smartphone Users

in Indonesia

Indonesia’s population is entering the middle-class and affluent consumer (MAC)

Source : id.techinasia.com

FINTECH UPRISING IN INDONESIA 5

3. INTERNET AND DEVICE USER

Internet Penetration di Indonesia

34.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2010 2011 2012 2013 2014 2015 2016

Pe

ne

tra

tio

n P

erc

en

tag

e

Years

Indonesia Internet PenetrationIf we look at data trends in the chart onthe right, it can be concluded that from2010 to 2016, internet penetration inIndonesia tend to rise. This possibilityalso caused by the increase in thenumber of smartphone users that havean impact on the level of Internetusage has also increased.

Source : APJII, We Are Social, Techinasia

FINTECH UPRISING IN INDONESIA 6

4. FINANCIAL SERVICES SECTOR

• Sektor Jasa Keuangan (SJK) Indonesia isdivided into three major groups, Banking,Capital Markets and Industri Keuangan Non-Bank (IKNB)

• Composition of assets Financial ServicesSector in Indonesia is 74% of the banks. 10%Insurance and the remaining 16% is more IKNB

• To boost IKNB asset required an innovation.One of them with the product digitalizationIKNB. The consideration is the increasingnumber of Indonesian population, thegrowing number of MAC Indonesia, theincreasing number of smartphone users inIndonesia and also increasing Internetpenetration in Indonesia.

Source : OJK, Komposisi Aset Sektor Jasa Keuangan

Indonesia 2014

Banking

74%

Insurance

10%

Financing Company

6%

Mutual Fund

5%

Pension Fund

2% Stock/ Securities

company

1%

Others IKNB

2%

FINTECH UPRISING IN INDONESIA 7

A. FINTECH SECTOR

8

In this report we will cover some important players within each categories that

impacted on the shaping the FinTech ecosystem in Indonesia. We will break down into

several part of each sector covered by FinTech startup:

1. Credit & Insurance

2. Loan

3. P2P Lending

4. Investment

5. Crowdfunding

6. Financial Management

7. POS

8. Payment & Transfer

9. Upcoming FinTech Startup

10. Corporate Mobile Payment

FINTECH UPRISING IN INDONESIA

1. CREDIT & INSURANCE

9FINTECH UPRISING IN INDONESIA

FinTech in Indonesia dominating by this sector, in 2014 only 36% of people connected

to the formal financial institution. While bank trying to educate people with their

financial product, comparison site born to bridge the gap. Delivering the information

of banking financial instrument simultaneously educate them how it works and the

benefit for each publisher of credit card, loan, investment and insurance.

CekAja.com is most completed financial and insurance comparison portal in Indonesia with

hundred of credit cards, deposits and loans from thousand trusted banks.

Comparing Credit Card and Financial product from thousand banks at Cermati.com. Cermati

helps you to save time and money

Compare and register online for applying credit card, home loans, personal loans & deposits in Indonesia. Application process through

Aturduit.com

DuitPintar is site for trusted credit and loans, place for comparing complete financial product in Indonesia. Check simulation from online

calculator.

2. LOAN

10FINTECH UPRISING IN INDONESIA

Loan startup just gain popularity in recent years, it’s offer more transparent and easy

applying compared to conventional bank loan. However the interest rate possibly

higher than the bank interest. Some people worried it could be another form of shark

loan, but we believe startup in this sector has important role to fill the gap the need of

quick loan comparing to the bank requirement which it takes longer process and more

difficult to fulfill for some people.

Pinjam Indonesia is an technology startup who

provide financial service by developing digital platform to help customer solving their need on quick funding.

UangTeman is first online short-term micro lending in Indonesia. UangTemanprovides short-term micro lending loan without premise, without collateral, without cuts and without

penalty

Taralite started from a dream to liberate Indonesian people from financial concerns. Today, a lot of needs in various phases of life that is very burdensome financially. They provide the loan solution.

Ruma launched Mapan, essentially a digital arisan platform that allows users to purchase big-ticket items and manage groups payments. Ruma helps low income communities to gain more benefit through technology.

B. FINTECH DISTRUPTION

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SMEs in the ASEAN region still rely

solely on their owners’ private funds

and savings. Indonesia itself rely on

internal funds rather than applying

for Bank Loans. Comparing to other

ASEAN countries, This figure indicate

Indonesian people still avoid

dealing with bank and Indonesian

people also tend to have less

intention to invest their money at

bank. People trust rate on banking

system still low, however it could be

great chance for FinTech startup to

have mutual benefit with the bank

or offer alternative investment

option for consumer.Source : SME Sources of Funding – Deloitte

C. FINTECH INVESTMENT

12FINTECH UPRISING IN INDONESIA

Startup Report in 2015 mention

about the investment growth of

FinTech will be next big thing with

11% from startup investment value.

We indicate there will be higher

growth by next year and more

sector of FinTech will be expand

following current FinTech trend in

ASEAN countries.

Source : DS Tech Startup Report 2015

E. FINTECH LANDSCAPE

13

We

bM

ob

ileLoan

FINTECH UPRISING IN INDONESIA

Financial Management

Credit & Insurance POS Payment & TransferInvestment

P2P Lending

Crowdfunding

ABOUT SDI LAB

SDI Lab stands for Startup Digital Innovation Lab. We dedicated ourselves toprovide market insight and analysis for the growth of startup ecosystem inIndonesia. Our research in digital industry can be a main reference for newstartups, competitor or VC to look up new opportunity and decision making forthe company. We create comprehensive report to deliver deeper andmeaningful information for stakeholders of startup and investors to understand wellabout current trend and Indonesian market landscape.

14FINTECH UPRISING IN INDONESIA

FINTECH UPRISING IN INDONESIA

2016

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