Indonesia has a population of about 270 million, and most of these other people do not have enough banking services or are underserved economically. Companies in the fast-growing economy still do not have access to fashionable monetary services, such as those we place in many evolved Western economies.
However, Indonesia has a relatively high cell phone and Internet penetration rate. This has led to greater adoption of monetary services based on mobile phones or smartphones. According to a new market report, the financial technology sector in Indonesia has grown in recent years. This has also created new opportunities for Swiss fintech corporations and other corporations.
Digital monetary revenues are expected to grow at a compound annual expansion rate (CAGR) of 34% and are expected to succeed at $8.6 billion by 2025. A report through McKinsey estimated that between 2014 and 2017, penetration of virtual banking in the country increased. up to 1.6x.
Indonesia’s banknote sector has expanded in recent years. The country’s invoice sector is governed by several established service providers supported by giant Internet corporations operating in Asia.
The growing invoice industry now presents new opportunities for fintech corporations in spaces such as payment security, visitor authentication, fraud detection, fraud prevention, customer knowledge coverage and foreign regulatory compliance for cash transfers, the report notes.
In addition, there are a number of other opportunities in the foreign letters sector in Indonesia. These are constantly being advanced so that invoices can be made with a lower charge and improve their efficiency. Indonesia now ranks first in terms of remittance receipt. However, prices related to the budget transfer to the country remain too high (more than 6.12% in the first quarter of 2020), the report reveals.
The COVID-19 outbreak has also created many challenges for Fintechs in the country. However, Swiss Fintech firms might now consider entering the nation’s Fintech industry by offering solutions that aim to address customer data verification and digital know-your-customer (KYC) requirements. Swiss companies might also consider providing credit scoring or rating tools that use non-traditional data sources.
The report also notes that investment and wealth management services are another key Fintech segment that could become widely adopted in the country.
Others that might be suitable for Indonesia are those that will help modernize existing banking systems and IT infrastructure, the report said. He added that other fintech, such as knowledge cleansing, knowledge research and automation of robotic processes, would possibly also be necessary through Indonesian companies. Cloud accounting, software as a service (SaaS), and virtual acquisition may also be required in the future.
As recently reported, there are more than 240 fintech corporations operating in Indonesia, which has a leading global economy in Southeast Asia.