Fintech Report is DSResearch's annual report to provide updates on the ﬁnancial
technology industry in Indonesia.
In this report, we focus on:
Fintech has evolved in signiﬁcant ways and continuously become more mature at an accelerated pace
over the course of 2019. This year, the demand of ﬁntech products had grown rapidly and achieved mass
adoption to people’s lifestyle. With big developments ranging from the rise of ﬁntech products awareness
up to ﬁntech’s impact on national GDP has become another big year for ﬁntech.
Fintech Report 2019 is based on a nationwide survey encompassing responses from 1500 people in
nationwide. Questions sought to yield perspectives of usage and attitude in public acceptance towards
ﬁntech products and also exploring the emergence of growth and trends in the ﬁnancial industry. It sheds
light on the impact which ﬁntech ecosystem will have on all the stakeholders, the challenges and concerns
that all sectors will face, and the emergence of new businesses and monetization models in this space.
This report is conducted by DSResearch and supported by BRI & BRI Ventures to gain more insights on
ﬁntech’s overview in 2019.
The ﬁntech industry dynamics and its ecosystem overview in 2019.
Industry perspectives towards ﬁntech growth, trends, and regulations in 2019
Public acceptance of usage & attitude by ﬁntech products.
Prospective strategy of ﬁntech in upcoming years
3. Bank Rakyat Indonesia (BRI) is one of the largest state-owned banks in Indonesia. It’s founded in
Purwokerto, Central Java, by Raden Bei Aria Wirjaatmadja on December 16, 1895. The strength
of BRI lies in serving the segment of micro and small medium enterprises.
BRI’s vision is to provide ﬁnancial services to all Indonesians nationwide, including the remote
areas. To realize this, it needs to be supported by suﬃcient infrastructure, including network of
branches and branchless agent throughout the archipelago. As the market keep growing, along
with its commitment, BRI keeps innovating to provide the best services to its customers.
Getting through digital era, BRIAPI, a BRI’s product, serves to enable third parties to use Bank
BRI’s ﬁnancial service functions or features into their platforms in a secure and safe manner.
With BRIAPI implementation, Bank BRI is the ﬁrst bank with open API system in Indonesia that
has ISO 27001 and OJK certiﬁcation. BRIAPI is expected to link Bank BRI and ever-growing startup
industry, in particular to extend digital collaboration in realizing a super ecosystem to accelerate
ﬁnancial inclusion and to bring ease of access of ﬁnancial services to society. With this, we
believe, “No one left behind!”
BRI Ventures is the Corporate Venture Capital arm from Bank BRI, the largest bank in Indonesia. It
is established to accelerate innovation and give support to Bank BRI by investing in high-growth
companies with strong digital ecosystem-enablement angle.
Supported by the network and reach of its holding company, BRI Ventures is uniquely positioned in
the market to help entrepreneurs get a strong local presence, by building its business with real
value creation, and eventually drive Indonesia’s digital economy.
4. 01 04
PART 4 CLOSING
FINTECH ECOSYSTEM IN
GROWTH AND TREND
REGULATIONS IN 2019
FINTECH IN (NEAR) FUTURE
IMPACT ON ECONOMY
BANKED AND UNBANKED SOCIETY
FINTECH'S PUBLIC PERCEPTION
FINTECH PRODUCTS' AWARENESS
Fintech Ecosystem in Indonesia
The ﬁnancial technology (ﬁntech) in Indonesia oﬀers a broad variety of ﬁnancial services, including
transaction settlement, capital raising, investment management, fundraising and distribution insur-
ance, market support, equity crowdfunding, and other ﬁnancial support and service activities. This
year, the scene is still highlighted by lending and payment companies.
The OJK (Indonesia’s ﬁnancial services authority) has listed more than 100 licensed ﬁntech lending
companies as of early this year, and the number is expected to grow throughout the year.
OJK also maintains various services related to digital insurance, investment, and crowdfunding;
while payment and remittance are regulated by Bank Indonesia.
The e-money apps are currently super popular to facilitate many payment activities, from shopping,
entertainment, to transportation. The introduction of QRIS to unify mobile payment transaction in
2020 will play a bigger role to shift Indonesia to be a cashless society.
We have witnessed OVO, a leading payment company, to be the ﬁrst unicorn startup coming from
ﬁntech vertical. We expect some lending companies to follow in the near future.
In the bigger picture, 99 million unbanked people, according to the e-Conomy SEA 2019 by Google,
Temasek and Bain & Company, is a huge opportunity for digital ﬁnancial services to help the govern-
ment in ﬁnancial inclusion issue. The research also shows the projected growth in digital ﬁnancial
services in the region.
SEA Consumer Payments (GTV, $B)
114B 1,100B 2,300B
(Loan Book, $B)
(Loan Book, $B)
(GWP, $B) 2019 2025
source: e-Conomy SEA 2019
Fintech is considered to be as a result of the massively developed information and communication
technology infrastructures in the country during the last decade. Currently only around 60 percent
of Indonesia’s adult population have conventional banking accounts, while around 130 million
Indonesians use mobile phones to access the Internet.
Fintech, especially lending, has been arguably the fastest growing sector in recent years. The Indonesian Finan-
cial Services Authority (OJK) recorded the total ﬁnancing channeled by technology-based lending service
providers as US$951 million in the ﬁrst three quarters of 2018, and projects the total loan ﬁgure to grow to
US$2 billion by the end of 2019. Among the startups that received massive investments in 2018, three belong
to this sector. These include FinAccel (Kredivo) with US$30 million in Series B funding, C88 with US$28 million
Series C round, and Moka with US$24 million in Series C funding.
Aside from P2P lending, digital payment services also hold promise in Indonesia. A study by MDI Ventures and
Mandiri Capital entitled “Mobile Payments in Indonesia: Race to Big Data Domination” predicts that the mobile
payment market will reach US$30 billion in total gross transaction value by 2020, and reach a compound
annual growth rate of 158% for the period between 2016 and 2020.
TYPE OF FINTECH
source: Indonesia Fintech Association (2017)
Total (US$15 Billion)
Point of Sales (PoS) Crowd
This gap obviously encourages startup entrepreneurs to take advantage of those untapped opportunities.
Initially, the emerging ﬁntech business was expected to be an initiative capable of harmonizing ﬁnancial
inclusion in Indonesia through expanding access, reducing costs, and increasing eﬃciency. Slowly, ﬁntech
appears and currently are considered to be commonly following this disruptive pattern. They come with
products and services that continuously improved and expanded beyond their scope.
There are some slightly diﬀerent data, but both show the large amount of ﬁntech transactions in Indonesia,
at around US$15 billion in 2017. Of that number, most of them are engaged in the payment sector, followed
by investment and lending.
The main sectors exposed to this risk at the moment are ﬁnancing and funding. It might not be surprising
if conventional banking will eventually only be a kind of ‘cashier’, while other products and services are
oﬀered by ﬁntech due to their ﬂexibility and eﬃciency in operational activities.
In 2019, ﬁntech is expected to remain at the forefront of Indonesia’s digital industry, with the potential of
collaborations with ﬁnancial institutions. Fintech players will also need to form partnerships with
merchants of various sizes, from small and medium enterprises (SMEs) to big businesses, to facilitate
wider adoption. Insurance and wealth management also hold potential for ﬁntech applications, as many
Indonesians currently do not have insurance coverage of any form.
Fintech ecosystem itself has been growing massively this year. OVO has emerged as the ﬁrst unicorn
among ﬁntech companies. Some other players, like Akulaku, Kredivo, and Modalku also have high valua-
tions at more than US$100 million. That indicates optimism and trust from investors about the potential of
the industry landscape. Signals of collaboration between players, traditional and digital, are becoming
apparent today — ﬁntech acts to educate the market, unbankable society about various ﬁnancial products.
In addition to OJK, Bank Indonesia is also being a key regulator in the ecosystem. It initiates QRIS (Quick-Re-
sponse Code Indonesia Standard) as a ﬁrst step to create synergies among digital payment platforms. This
policy allows one access code to receive payments from various types of registered applications.
“Fintech is generally carried out by startup companies, although this is not
always the case. In addition, not infrequently large companies, including
conventional banking and ﬁnancial services, also invest in existing ﬁntech
businesses. Thus, while the technology provides the opportunity to
disrupt the market, we have to question the potential for ﬁntech to really
fundamentally change the business and economic landscape.”
— Riemer et al., 2017