ARTICLES — May 29, 2019

FinTech Indonesia: Banking the Unbanked

FinTech, or financial technology, is currently rising in Indonesia. Indonesia has been a promising market for FinTech companies with a growth of 78% since 2015. However, the fact remains that 66% of 270 million Indonesians do not have a bank account or unbanked. This ongoing phenomenon creates a new challenge but also a lucrative opportunity for FinTech companies regardless of the sector. This is how Indonesian FinTech companies can take advantage of the opportunity.

Set Low Rates to Reach the Medium/Low Unbanked
The unbanked included in the medium/low FinTech market is a special case worth looking into especially for the peer-to-peer lending sector. In order to help them reach financial inclusion, setting low rates will help them get access to useful, affordable financial products and services that suit their needs.

Use IoT Solutions’ Analytics to Get to Know Customers Better
IoT integration within FinTech companies will profit both parties, seeing the fact that IoT will give them valuable insights into user activity, preference, and behavior. These analytics can be used to gain better market insight that leads to successful business development. For instance, the Online Payment Processing sector could look into setting up special partnerships with your potential customers’ favorite merchants as a way to bring in more active users. Some products within this sector include LinkAja, Go-Pay, or OVO.

Make it Easy for Customers
IoT’s advanced data collection and fast process give FinTech companies the visibility and location-based accuracy needed to give the best customer service and security. For example, within the mobile wallet applications sector, you can monitor all of your IoT devices for problematic behaviors using Telkomsel IoT Control Center, you can resolve a customer’s issue before the complaint call comes in. Doing so may increase your customer’s trust in your solution.

Educate and Inform Customers on Good Financial Behavior
In general, customers are going to need information about their financial activities. Providing them detailed reports and giving bits of financial advice will increase their dependency and trust in FinTech companies’ products and services whatever sector your company might be in. Moreover, this information will provide safety reassurance to the customers.

The Importance of Regulations
There are plenty of cases where some of the products/services pushed users into deeper financial challenges. When it comes to unbanked rural communities, regulations are needed to keep things in the right place. Providing FinTech products/services will definitely help certain members of said communities, but at the same time, FinTech companies have the responsibility to ensure that users fully understand the terms and conditions and how specific products will affect their day to day financial condition.

Building and taking part in Indonesia’s Industry 4.0 may sound like a complex task. Fortunately, FinTech companies and IoT providers in Indonesia are at their peak performance today. With mutual goals and the eagerness to reshape Indonesia’s financial world, their challenges in the future won’t be that hard to beat.

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