The Synergy to Drive Innovation of Digital Finance to Accelerate Financial Inclusion
JAKARTA, Indonesia, Oct. 2, 2019 /PRNewswire/ -- The emergence of innovation in the economic sector provides for financial services, particularly to those who have no access to financial services or products. The synergy between the stakeholders, such as the regulators and the industry players, is essential to create an ecosystem that provides a positive impact toward economic development and digital finance as well as to drive economic growth. The importance of the synergy to drive economic innovation and digital finance serves as the basis for the organizing of the conference and exhibition on financial technology (fintech), the Indonesia Fintech Summit & Expo (IFSE) 2019. Carrying the theme of "Innovation for Inclusion", the exhibition is inaugurated on 23 September, 2019 at the Jakarta Convention Center, Jakarta. The official inauguration was conducted by Coordinating Minister for Economic Affairs of the Republic of Indonesia, Darmin Nasution, accompanied by Minister of Finance, Sri Mulyani; Governor of Bank Indonesia, Perry Warjiyo; Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso; and Chairman of Indonesian Fintech Association (AFTECH), Niki Luhur.
Minister Darmin Nasution said the government must support the innovation of financial technology to accelerate financial inclusion. "Everyone must support the rapid technological advancement in the financial sector so it can provide benefit to the public. Improving the access to the financial services and products will drive and increase the national economy," said Darmin. He added that to support the growth of fintech in Indonesia, the government will emphasize on light touch and safe harbour approaches.
During the Fintech Visionary Talk, Minister Sri Mulyani said the development in Indonesia must be inclusive and non-discriminative. She said the government's investment in the infrastructure sector is part of the effort to support the development, including in the technological and fintech sectors, to enable everyone to access it. Commenting on the rapid growth of the fintech industry, the minister said the Finance Ministry will continue to support the industry through regulations based on the above-mentioned approaches.
The Governor of Bank Indonesia, Perry Warjiyo, further said that Bank Indonesia is very committed to develop the payment system and facilitate the development of financial inclusion as reflected by some of its policies and programs. The first program is the electronification of non-cash social assistance that was channelled to 15.6 million households, electronification in the transportation sector, and electronification of government's transactions. Second, the end-to-end integration process of the payment system with the digital economy whether from banks, fintech, or e-commerce to the public and the central bank. Third, ensuring the interlink between financial technology and banks to prevent the shadow banking risk. Fourth, ensuring the balance between innovation and consumer protection, integrity, and stability as well as a healthy competition by, among others, strengthening the regulatory sandbox. Fifth, keeping the national interest in the cross-border digital financial economy by forcing that domestic transactions must be processed in Indonesia, and cooperation of local and foreign operators, including with authorities of the foreign central banks, whilst maintaining the reciprocal principles. In this sense, Bank Indonesia welcomes any collaboration to realize the digital economy and digital finance as the sources for economic growth. Further, the Governor of Bank Indonesia also mentioned that Bank Indonesia has issued a number of policies to support the development of the payment system in Indonesia, such as the QR Code Indonesia Standard (QRIS), which was launched in August 2019, and the perfection of the Bank Indonesia National Clearing System (SKNBI). Moving forward, we need to strengthen the synergy between the stakeholders to support the digital economy and digital finance as the sources of economic growth, as well as creating the ecosystem that drives the innovation of digital economy and finance.
OJK Chairman, Wimboh Santoso, said people need to optimize the development of the information technology to support inclusive economic growth and improve the efficiency of the transactions in the financial sector. On the other hand, fintech consumers' protection must be carried out through the implementation of code of conduct by fintech association, and regulations on the protection of consumers' data. OJK's commitment to support fintech and digital finance innovation is evident through several OJK Regulations (POJK) that regulate fintech such as POJK No.77/2016, POJK No.13/2018, and POJK No.37/2018. Currently, there are 48 fintech companies listed in 15 clusters of digital financial innovation, 127 registered peer-to-peer lending companies (as of August 2019), and one registered equity crowdfunding company.
Within the last years, the fintech industry is growing rapidly. The Indonesian Fintech Association (AFTECH), as the umbrella organization for all fintech companies in Indonesia, to date has 280 members, of which 250 are fintech companies operating in various sectors such as digital payment system, online lending, digital financial innovation, insuretech, equity crowdfunding, and others. The rapid growth of the fintech industry can provide a great contribution to the public, particularly to the retail and unbanked segments. IFSE 2019 is the realization of the fintech industry's commitment to support the financial inclusion target of 75 percent by 2019. This is done through various solutions from the fintech industry to the public that meet the public's needs and lifestyles.
AFTECH Chairman, Niki Luhur, said the value-added of the fintech industry lies on the distribution mechanism. "Fintech is utilizing the latest channels such as through websites, mobile gadgets, and others. This allows fintech players to reach out to the public, even those in remote areas, who cannot enjoy financial services and products of conventional banks," said Niki. Niki also emphasizes the importance of cross-industry collaboration to provide consumer protection from fraud, cybercrime, and others. Consumers' data protection is one of the major concerns of the fintech industry and the government since the fintech industry heavily relies on consumers data in processing the transactions. Therefore, the industry needs clear and firm regulations on consumers data governance, use, and protection.
IFSE 2019 consists of several agendas such as the summit, the exhibition, and other supporting programs. Attended by more than 800 delegates (from regulators, the government, donor institutions, fintech players, researchers, finance sectors, and others), the conference presents more than 100 world-class speakers to discuss various important issues related to the development of fintech industry and its impact to the public, particularly the unbanked and underserved segments. In the exhibition area, more than 100 fintech, financial, and technology companies are showcasing their technology-based services and products with real benefit to the public.
More than 100 fintech companies are taking part in the IFSE 2019 in several categories such as P2P Lending, Digital Payment, Wealth Management, Digital Financial Innovation (Market Provisioning/Aggregator, Enabler, Equity Crowdfunding, Insuretech, and others), and Sharia Fintech.
The committee also organizes financial literacy program for the public in the exhibition area to educate and provide a better understanding of the fintech services and products. The program is delivered in a form of talk show with various topics such as:
- Payment system: Payment Solution and Consumer Protection, Fintech Solutions for SMEs
- Basic Understanding of P2P Lending Fintech
- The Role of Fintech Agents in Improving Financial Inclusion
- Launching of AFTECH Handbook for Personal Finance: Tips and Tricks on Smart Financial Planning
IFSE 2019 is the largest fintech event in Indonesia jointly hosted by the Financial Services Authority (OJK), Bank Indonesia (BI), and the Indonesia Fintech Association (AFTECH), with the support from the Indonesia Joint Funding Fintech Association (AFPI), and Indonesia Sharia Fintech Association (AFSI). The event is also supported by related ministries and institutions such as the Ministry of Finance, the Ministry of Communications and Informatics, the Creative Economy Agency, Bill & Melinda Gates Foundation, World Bank, and others.
PR Newswire is the Media Partner of Indonesia Fintech Summit & Expo 2019.
About the Indonesian Fintech Association (AFTECH)
Indonesia Fintech Association (AFTECH) is the organization appointed by the OJK as Association of Digital Financial Innovation Organizers (IKD) as the umbrella for all fintech companies in Indonesia. Established in 2016, to date AFTECH has more than 280 members that consist of 250 fintech companies, 24 financial institutions, 7 knowledge partners, and 3 technology partners. AFTECH main mission is to help accelerate financial inclusion through technology financial services and becomes the trusted catalyst for the development of fintech ecosystem. AFTECH is the organizer of the Indonesia Fintech Summit & Expo 2019.
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