Personal Finance in Indonesia - Market Research and Product

1. Personal Finance Apps In Indonesia Market Research and Product Strategy Kiki Ahmadi http://kikiahmadi.com

2. Author - Kiki Ahmadi Other Reports Written : ● Insurance Market in Indonesia ● Slipicon Valley Cluster Analysis on ﬁntech and startup landscape ● Investing Fintech in Indonesia ● How to Develop Loan Product ● Warung : Next Frontier in Indonesian Startups Public Presentations : ● From Ideas to Rollout ● Navigating POJK77 11-years experience in telco and digital industry in Indonesia. Msc in Innovation Management - University of Manchester. LPDP Awardee - PK 63 Currently AVP Business Development in Amartha. Email : hello@kikiahmadi.com - Blog : https://kikiahmadi.com - Linkedin : https://www.linkedin.com/in/kikiahmadi/

3. Research objective 1. Industry overview on personal finance apps in Indonesia 2. Problem to solve of financial tracker apps 3. Key players in this space 4. Highlights on value proposition and business models 5. Regulatory landscape related to personal finance apps 6. Strategy and Go-to-market for personal finance 7. Key Partners and Enablers 8. Conclusion

4. Industry Overview - Personal Finance Indonesia is a country with low penetration of financial services. Most people are only aware of definition and merits of basic financial services like savings Based on the same survey, financial planning to prepare for future needs is not something people do in Indonesia. Personal finance startups are niche. Jojonomics started as one but later pivoted to B2B. There is also Finansialku who expand into media 48 % have bank account 34 % Active account % use account for savings 22 1. Data from Worldbank Findex 2. Survey Nasional Literasi Keuangan OJK 2016 Financial Services Penetration in Indonesia % Financial Literacy in Indonesia (% people who understand the product) 90 Understanding of Savings 60 Understanding of Insurance 15 Understanding of Capital market 22 Understanding of Retirement Fund 42 % do financial planning 12 % of planning for kids education % of planning for retirement 6 Financial Planning Behaviour (% that plan for future financial goals) Jojonomics ● Started as personal finance tracker ● Got seed funding in 2015 ● Pivoted to B2B corporate expense tracker Finansialku ● Started as conventional financial planner in 2013. Pivoted to startup in 2016 ● Latest funding stage is still Angel ● Prominent for financial article, podcast and offline events

5. Advisory Clients Private advisory starts at 750k / hour Come to Offline Class Jouska class starts from 500k BigAlpha class starts from 200k Buy Online Services Jouska online class starts at 150k BigAlpha Stock Ebook is 250k Non-paying followers Jouska has 620k instagram followers BigAlpha has 102k twitter followers Recently financial account such as Jouska and BigAlpha make financial literacy a cool thing Jouska is a financial advisory firm with huge following on Instagram. They provide workshop and advisory on personal finance planning Similar with Jouska, BigAlpha has huge following on twitter. Apart from advisory, BigAlpha also publish quarterly stock recommendation Both Jouska and BigAlpha drive interest in financial planning and investment. Their huge following signified big demand. Jouska + BigAlpha Funnel However most of their bandwagon might not afford their services This could be an opportunity for personal finance app.

6. As awareness rises, the challenge is how to make people get benefits of financial planning without dealing with complexities and high price Expense tracking is cumbersome. Most people just don't bother to do it Financial products like investment and insurance is hard to understand for majority of Indonesians Access to personal financial consultancy and advisory is expensive

7. Players in Personal Finance Space Startups in personal finance space is still quite niche. However, as per July 2019, there are 6 startups which registered in OJK Industri Keuangan Digital in financial planner category. OY! On the other hand is registered in Bank Indonesia as part of payment ecosystem Finansialku >100k downloads Fundtastic >10k downloads Ponsel Duit (Pede) >1 mio downloads PayOk >100 downloads Arkana >500 downloads OY! >500k downloads Halofina >10k downloads

8. Halofina Founder : Adjie Wicaksana, Eko Pratomo Latest Funding : Seed Round, Mandiri Capital , undisclosed, 2019 Halofina is a personal financial startup founded in 2016. Halofina help user to asses, plan and invest their financial goal through robo advisory platforms. Halofina is based in Bandung. As fintech startup, Halofina is registered in OJK sandbox under financial planner. In November 2019, Halofina raised undisclosed pre-series A round led by Mandiri Capital. Services provided : Halofina has several key features ● Lifeplan - goal-based financial planning ● Smart Savings - savings with 7% interest ● Vinapedia - financial education features ● Lifeplan Tracking Halofina app is free to use. Platform Integrations : ● Indogold for Gold Instruments ● Various reksadana provider Key Numbers ● 13,000 users ● 54,000 lifeplan created

9. Haloﬁna - LifePlan Features Haloﬁna offer goal-based investing features called Lifeplan. Each lifeplan will recommend what suitable investment instruments to achieve that goal

10. Finansialku Founder : Melvin Mumpuni, Alvin Augusto, Harris Darmawan Latest Funding : - Founded in 2013 as conventional financial planning firm. Transforming into digital startup in 2016. Finansialku app offer personal finance tracking, investment product and 24 hour consultation with financial planner. Finansialku also churn out financial content regularly via articles and podcast Services provided : Finansialku has three-offering ● Financial apps ● Offline events ● Media (articles and podcast) Premium version of the app cost 350k per year. Private advisory starts from 500k per hour. Platform Integrations : ● Bareksa for reksadana Key Numbers ● 11 thousands active users ● 6 thousands premium users

11. Finansialku - Book Financial Advisor Finansialku offers ﬁnancial consultant features however they are not real time, more like in-app email consultation

12. Fundtastic Founder : Harry Hartono Latest Funding : - Very little information on Fundtastic. Last active Linkedin post is back in November 2019. Services provided : Fundtastic offer all-in-one personal ﬁnancial services : ● Spare-change investing ● Investment in Gold and Mutual Funds ● Consult with Financial Planner Platform Integrations : ● Invisee for reksadana ● Indogold ● Danain for P2P lending

13. Fundtastic - Spare Change Investing Spare change investing rounds up every transaction made and transfer it to user investment of choice. It connect to user’s BCA bank account

14. PeDe (Ponsel Duit) Pede (PT IndoAlliz Perkasa) is part of Salim group and joint-venture with Allianz Pede or ponsel duit is a personal financial apps developed by IndoAlliz Perkasa. Similar like fundtastic, there is limited information on the company and app. However, Pede is clocking more than 1 mio download on Google Play. This is more than all 6 of IKD-registered personal finance apps combined. Services provided : Pede provide multiple financial services ● Financial health check through chatbot ● Spare-change investing starting from 1000 rupiah ● Gold-invest ● Insurance ● Personal Lending ● Bill Payment ● Money Transfer Platform Integrations : ● Julo & Tunaiku for P2P Lending

15. PeDe (Ponsel Duit) - Sasha Chatbot Sasha “Chatbot” apparently is just a simple form replacement to do bare-minimum ﬁnancial check. Product recommendation is also very generic.

16. PayOk Founded in 2018, PayOk is lifestyle finance app that help manage their finance securely from multiple finance institutions. However, similar to Fundtastic, last activities from their Linkedin Pages was back in December. Website is not active as well. Seems like the company is shutting down. Services provided : PayOk main service is personal financial tracker. They provide integration with Bank Account and even e-wallet to populate transaction history data. Platform Integrations : ● n/a

17. OY! Founder : Hilﬁ Alkaff, Jan Kristanto, Jesayas Ferdinandus Latest Funding : Seed Round, 2018, undisclosed OY started in 2017 as a chatting app with money transfer features. However in 2018, they pivoted and offer low-cost interbank transfer as their main VP. Starting from 2019, they expand into B2B business offering payment and cash disbursement solutions. On their B2C business, OY also start to move into personal ﬁnance by offering bank account integration. Services provided : OY main services is low-cost interbank transfer. User can transfer from OY account into any bank account. OY charged IDR 1500 per trx, cheaper than standard interbank fees of 6500. Platform Integrations : ● Doku for payment processing

18. OY! - Bank Account Integration (1) OY has feature to connect into internet banking but its buried inside another feature. User need to set account for receiving funds ﬁrst. Then connect their internet banking account

19. OY! - Bank Account Integration (2) The app asked for internet banking username and password then read current balance and transaction record. Each transaction record could also be tagged and categorized. OY also has dashboard to see high-level overview of users income and expense. It can also aggregate multiple records from multiple bank accounts.

20. Regulatory Landscape on Personal Finance Startups According to POJK 13 / 2018, Financial Planner app falls under cluster of IKD (Industri Keuangan Digital). Fintech who operates in this line of business needs to go through regulatory sandbox in order to be ofﬁcially registered. Sandbox license is valid for 1 year and can be extended every 6 months. During sandbox period, ﬁntech must open all relevant data for OJK.

21. Summary of POJK 13 / 2018 - Digital Financial Industries Sandbox Pasal Tentang Ketentuan 4 Bentuk Perusahaan Harus berupa PT atau koperasi 7-13 Regulatory Sandbox Berlaku 1 tahun dengan opsi perpanjangan 6 bulan Setelah berakhir masa sandbox, ada 3 jenis rekomendasi : direkomendasikan, perbaikan dan tidak direkomendasikan Wajib mengungkapkan informasi penting dan relevan selama masa sandbox 17 - 22 Pemantauan Penyelenggara wajib melakukan pemantauan mandiri dan inventarisasi resiko Wajib bergabung di asosiasi penyelenggara 28 Tata kelola Wajib memiliki rencana strategis dan kebijakan prosedur 29 Pusat Data Wajib memiliki pusat data dan pemulihan bencana di Indonesia 30 Perlindungan dan kerahasiaan data Data pengguna dapat dimanfaatkan dengan memenuhi syarat sebagai berikut : ada persetujuan, menyampaikan batasan pemanfaatan data, menyampaikan perubahan pemanfaatan data dan menggunakan metode penyampaian data yang terjamin keamanan dan keutuhannya.

22. 3 Ways to Play for Personal Finance App Most people don't track their expense and only aware of their account balance (Saldo) Financial products are not easy to understand Access to personal financial advisory is still expensive Seamless financial checkup Tools using bank account integration Offer simple financial product with tailored recommendation Deliver low-cost financial advisory at scale Personal Finance AppDrive New Users Generate More Profit

23. Building Seamless Financial Check-up Feature Connection with Bank Aggregator Three modules of ﬁnancial check-up features. Each module ideally has little dependency with each other hence can be developed individually Direct Connection with Banks Manual Input from Users Data Visualization of Users Financial Records Data Feed to Financial / Non-ﬁnancial Partners Data Feed to Financial Advisory Partners Get Mutasi Rekening Module Visualization Module Data Feeding Module

24. Highlights on Plaid & Teller Plaid is US-based startups offering API Connections to variety of US Banks. Plaid powered hundreds of global ﬁntech apps to access user’s current or savings account in their banks. Plaid use screen-scraping to deliver their services In January 2020, Plaid was acquired by Visa with USD 5.3 billion valuation Alternative to Plaid is Teller which originated from the UK. Plaid is currently still in Series A with latest funding of 4 USD Million. Currently there are no equivalent for these available in Indonesia

25. Leveraging Open APIs to get Mutasi Rekening BRI has the simplest process for API registration. Everyone can register and get access to sandbox. BCA has open APis but signing up and getting developer key takes approval process. BNI API strangely does not provide functions to get transaction history. Registration is as simple as BRI. Mandiri API is still limited registration. Mutasi Rekening functions is available To build seamless ﬁnancial check-up features, startups need to get account history information in API format. Currently 4 big banks offer API connectivity but only 3 offer mutasi rekening endpoints.

26. Sleek UI / UX to Simplify Complex Financial Information Level Money app shows very simple single number of how much should you spend each day, week and month. Level Money acquired by CapitalOne in 2017. Robinhood simplify stock trading views by utilizing lots of white space. Their app also striped away lots of information from the conventional stock-trading app which usually cluttered with ticker-names and numbers

27. https://www.cbinsights.com/research/report/millennials-and-the-future-of-wealth-management/

28. Personal finance app value for financial advisor : Data gathering, payment and user acquisition tools User Activities Benefits for Financial Advisor Partners Sync bank account Consult financial advisor Read financial articles Get investment recommendation Personal Finance App (e.g Halofina) Tools to get client’s financial information before consultation Online project delivery Promotion and user acquisition Handle payment Buy financial products Personal finance app can position itself as tools to streamline financial advisor workflows. Making their work faster in exchange for preferred pricing users

29. Example ﬁnancial advisor pricing in Betterment

30. Example ﬁnancial advisor pricing in QM Financial & Jouska QM ﬁnancial charge 200-250k for online class. Private consultation starts at 549k per hour. Jouska charge 125k for all their online class. Private consultation is 1 mio for 2 hours.

31. Potential Financial Advisor Partners ZAP Finance Jouska BigAlpha QM Financial Strong Points Huge following in instagram 103k followers Due to personality Prita Ghozie, perceived as “syariah” financial planner Massive following on social media Financial advisor for millenial Premium pricing Huge following on twitter Popular amongst millennial More like investment advisor rather than financial advisor Financial Advisor for more mature and higher net-worth segment Strategic Value for Can be lead customer to develop financial advisory features Can provide huge boost on marketing and branding for Provide premium options in app Partner to sharpen investment business Opening ways to tap-in older and more premium segment of users Approach Work together with them to sharpen financial advisory features Negotiate lower consultancy price in exchange for efficiency and potential high-volume of projects Explore possibility of co-branding or joint-campaign Negotiate to embed financial checkup feature in Jouska app Negotiate to have BigAlpha quarterly stock pick e-book to be sold in app Develop exclusive investment content in app Less priority right now. Approach when product and proposition is already proven with other financial advisor

32. Expected Challenges Regulatory Product Market Possible Risk Factor Bank account integration features could be seen as financial data breach both from customer or from the banks. Risk is higher if integration features is developed using 3rd party aggregator. New features (personal financial checkup and financial advisor) did not received well by the user COVID-19 pandemic bring economic uncertainties at the unprecedented level. Economic downturn can be bad for investment business Mitigation Partner with at least one bank who have API to launch this feature together Do MoU or Press Release with them, invite OJK as well For the speed of development still use integrator while building pipeline with the banks Develop the product together with financial advisory partners as lead customer In recession, financial advisor often seen increase in business This could be an opportunity as many people be anxious about their financial well-beings hence low-cost financial advisory might fit for them. Financial check-up tools could also help people lower their expense and help them save

33. Conclusion ● Personal finance startups are niche. Most Indonesians don't do financial planning hence the business value of providing financial tools is not clear yet. ● There is a recent surge of young millenials who are interested in personal finance and investment driven by social media popularity of Jouska and BigAlpha. However, due to their premium pricings, most of their followers. might not afford their services. This is an opportunity ● Personal finance and financial planner are regulated by POJK 13 / 2018. There are 6 other startups which falls under this categories. ● Three strategic pillars proposed to jump into personal finance space : develop seamless financial checkup tools, build financial product recommendation features and create financial advisory features for the masses. ● There are also three big challenges to develop personal finance app: Regulatory risk regarding getting user’s bank account data, getting product product experience right and business uncertainty during these COVID-19 times

34. References 1. https://www.cbinsights.com/research/personal-finance-apps-strategies/ 2. https://www.pwc.com/gx/en/financial-services/pdf/fin-tech-asset-and-wealth-management.pdf 3. https://www.forbes.com/sites/margueritacheng/2019/02/19/the-future-of-wealthtech/#70223e0235e6 4. https://stratechery.com/2020/visa-plaid-networks-and-jobs/ 5. https://www.forbes.com/sites/kristinstoller/2019/02/04/top-personal-finance-fintech-companies/#6d5888a65eab 6. https://cdn.idntimes.com/content-documents/Indonesia-millennial-report-2020-by-IDN-Research-Institute.pdf 7. Financial Penetration Indonesia - https://globalfindex.worldbank.org/sites/globalfindex/files/countrybook/Indonesia.pdf 8. OJK Survey Nasional Literasi Keuangan- https://www.ojk.go.id/id/berita-dan-kegiatan/publikasi/Documents/Pages/Strategi-Nasional-Literasi-Keuangan-Indonesia-(Revi sit-2017)-/SNLKI%20(Revisit%202017)-new.pdf 9. BigAlpha Class - https://www.loket.com/d/all-locations/all-categories/any-date/big%20alpha 10. Jouska Talks - https://www.loket.com/e/jouskatalks 11. OJK IKD 2019 - https://www.ojk.go.id/id/berita-dan-kegiatan/publikasi/Pages/Penyelenggara-IKD-dengan-Status-Tercatat-di-OJK-per-Juli-2019. aspx 12. BCA developer - https://developer.bca.co.id/api-catalog/apitester/tests/FIRe-Transactions/api 13. BRI API - https://apidocs.bri.co.id/#account-transaction-history-endpoint 14. BNI - 15. Finansialku Numbers - https://katadata.co.id/berita/2019/01/27/aplikasi-finansialku-catatan-keuangan-hingga-investasi-pengguna 16. Jumlah pengguna internet banking Mandiri - https://databoks.katadata.co.id/datapublish/2017/05/08/berapa-pengguna-mobile-banking-bank-mandiri 17. Fintech App Monetization Strategy - https://www.dashdevs.com/blog/four-best-app-monetization-strategies-for-fintech-firms/ 18. Business that thrive in recession - https://www.investopedia.com/financial-edge/0811/9-businesses-that-thrive-in-recession.aspx

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