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Indonesia Fintech Overview 2016
Fintech refers to technology-enabled innovation in financial services that could disrupt traditional models. Global fintech investment has grown substantially since 2010, led by North America. Consumer banking and payments are seen as the areas most likely to experience disruption. Fintechs focus on single services and extract value from data, while traditional banks offer multiple services and extract value from products. This evolution may help address Indonesia's large financing gap, as over half of its population lacks bank accounts and most small businesses rely on own funds rather than loans. Emerging fintech models like peer-to-peer lending, crowdlending, and online marketplaces could help connect borrowers and lenders in new ways.
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Indonesia Fintech Overview 2016
- 1. @aopres fb.me/aopres Financial Technology Whatis it and why does it matter for you and me? Art of Presentation
- 2. What is fintech? Disruptingthe traditional financial system
- 3. Global Fintech Investment 2010-2014 (In billions of USD) 6.67 32.36 9.9 0.140.33 0.9 0 5 10 15 20 25 30 35 Asia North America Europe Latin America Africa Middle East Source : US Department of Commerce โ 2016 Top Markets Report Financial Technology 6.67 32.36 9.9 0.14 0.33 0.9 0 5 10 15 20 25 30 35 Asia North America Europe Latin America Africa Middle East
- 4. Where will the disruption happen? 0% 10% 20% 30% 40% 50% 60% 70% 80% Consumer Banking Fund transfer andpayments Investment and wealth management SME Banking Brokerage Services Property and casualty insurance / life insurance Commercial Banking Insurance intermediary Market operators and exchanges Fund operators Investment banking Reinsurance Column1 80% 60% 38% 34% 29% 28.00% 26% 18% 12% 9% 9% 2% Source : PwC Global Fintech Survey 2016 0% 10% 20% 30% 40% 50% 60% 70% 80% Consumer Banking Fund transfer and payments Investment and wealth management SME Banking Brokerage Services Property and casualty insurance / life insurance Commercial Banking Insurance intermediary Market operators and exchanges Fund operators Investment banking Reinsurance Column1 80% 60% 38% 34% 29% 28.00% 26% 18% 12% 9% 9% 2%
- 5. Fintechs and Banks Focusin 1 service Intermediation Extract value from data gathered Small organization Short time to market State of the art technology Lots of services End to end services Extract value from products and services Big organization Long time to market Legacy technology Fintechs TraditionalBanks
- 6. The Fintech EvolutionFintech1.0 Worldwide Telecommunication AnalogConnector Fintech2.0 Worldwide Financial Institutions Digitalization of analog Fintech3.0 Developed Countries Startup Companies Financing gap post 2008 financial crisis Fintech3.5 Developing Countries Startup companies Sharing economy
- 7. Why does itmatter to Indonesia?
- 8.
- 9. 660 Trillion IDR Financialsector financing capacity
- 10. 989 Trillion IDR Financinggap opportunity
- 11.
- 12. How many people have bank accounts aroundthe world? Source : World Bank 2015
- 13. Structure of MSME Capital Own Funds82.7% Bank 13.4% Other 1.3% Individuals 1.3% Family Members 1.2% Borrowing, 17.3% Source : Bank Indonesia, OJK, World Bank 2015
- 14. Loans by MSME with Banks 2012- 2014 No 54% Micro 6% Small 27% Medium 13% Yes 46% Source :Bank Indonesia, OJK, World Bank 2015
- 15.
- 16. Letโs take alook...
- 17.
- 18. Peer to PeerLending Lender Borrower Pledge money to borrowing offer Payments and interests Online P2P Platform Post Borrowing Offers Money Transfer Payments
- 19. Crowdlending Project Owner Pledge money to fundproject Payments and interests Crowdlending Platform Post Project Money Transfer PaymentsSociety
- 20. Crowdfunding Society Project Owner โPledgeโ moneyto fund idea Product / Services / Etc depending on the idea Crowdfunding Platform Post Idea Money Transfer
- 21. Online Pawn Shop Pickitem category and online valuation Give the item Confirmation and receive payment with bank transfer
- 22. Aggregator Financial Services CompaniesFinancial Services Products Aggregator
- 23. "Uber, the worldโslargest taxi company, owns no vehicles. Facebook, the worldโs most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. Airbnb, the worldโs largest accommodation provider, owns no real estate. Something interesting is happening.โ Tom Goodwin
- 24. Disruption is thenew norm Break the tradition
- 25.
Editor's Notes
- #3ย Fintech has many opportunities in supporting the Rp 1.649 triliun needed financing in Indonesia. The current financing ability from the financial sector is Rp 660 triliun, hence there is a Rp 989 trillion financing gap.
- #5ย Banks extract over $1 trillion in revenues a year from over $400 trillion of annual payments, according to the Boston Consulting Group. As consumers in both rich and poor countries increasingly pay with credit cards or online and on their mobile phones, that figure could reach over $2 trillion by 2023. Banks currently dominate this ecosystem,which includes technology providers and payments networksโmainly Visa and MasterCard. FinTech newcomers, however, are increasing the size of the overall payments sector and may be cutting into bank margins. The next payment frontier is online payments, particularly mobile, as payment systems that are easy to install on a website and help boost the conversion rate from browser to buyer are attractive company investments. The payments ecosystems will evolve largely according to local circumstances. Every country has its own payments system based on traditions and consumer preferences. Figure 6 shows that regulators can and do upend entire payments systems. USG regulators are planning to speed up bank payments, after putting pressure on the banks to reduce their credit and debit card fees. Figure 6 above shows the status of payment infrastructure modernization. Four of the five countries discussed in this report have recently modernized their payment system. The other case study country, Australia, is in the build phase
- #6ย http://trade.gov/topmarkets/pdf/Financial_Technology_Executive_Summary.pdf
- #10ย Fintech has many opportunities in supporting the Rp 1.649 triliun needed financing in Indonesia. The current financing ability from the financial sector is Rp 660 triliun, hence there is a Rp 989 trillion financing gap.
- #11ย Fintech has many opportunities in supporting the Rp 1.649 triliun needed financing in Indonesia. The current financing ability from the financial sector is Rp 660 triliun, hence there is a Rp 989 trillion financing gap.
- #20ย The first company to offer peer-to-peer loans in the world was Zopa. Since its founding in February 2005, it has issued over ยฃ1.5 billion in loans.[6] In 2010 Funding Circle became the first significant peer-to-business lender launching in August 2010 and offering small businesses loans from investors via the platform.[7] Funding Circle has lent over ยฃ1.3 billion as of March 2016.[8][9] Both Zopa and Funding Circle are members of the Peer 2 Peer Finance Association (P2PFA).[10] SOcietyOne โ Australia Peer2peer finance association โ UK Lending Club - US
- #21ย The first company to offer peer-to-peer loans in the world was Zopa. Since its founding in February 2005, it has issued over ยฃ1.5 billion in loans.[6] In 2010 Funding Circle became the first significant peer-to-business lender launching in August 2010 and offering small businesses loans from investors via the platform.[7] Funding Circle has lent over ยฃ1.3 billion as of March 2016.[8][9] Both Zopa and Funding Circle are members of the Peer 2 Peer Finance Association (P2PFA).[10] SOcietyOne โ Australia Peer2peer finance association โ UK Lending Club - US
- #22ย The first company to offer peer-to-peer loans in the world was Zopa. Since its founding in February 2005, it has issued over ยฃ1.5 billion in loans.[6] In 2010 Funding Circle became the first significant peer-to-business lender launching in August 2010 and offering small businesses loans from investors via the platform.[7] Funding Circle has lent over ยฃ1.3 billion as of March 2016.[8][9] Both Zopa and Funding Circle are members of the Peer 2 Peer Finance Association (P2PFA).[10] SOcietyOne โ Australia Peer2peer finance association โ UK Lending Club - US
- #23ย The first company to offer peer-to-peer loans in the world was Zopa. Since its founding in February 2005, it has issued over ยฃ1.5 billion in loans.[6] In 2010 Funding Circle became the first significant peer-to-business lender launching in August 2010 and offering small businesses loans from investors via the platform.[7] Funding Circle has lent over ยฃ1.3 billion as of March 2016.[8][9] Both Zopa and Funding Circle are members of the Peer 2 Peer Finance Association (P2PFA).[10] SOcietyOne โ Australia Peer2peer finance association โ UK Lending Club - US
- #25ย The first company to offer peer-to-peer loans in the world was Zopa. Since its founding in February 2005, it has issued over ยฃ1.5 billion in loans.[6] In 2010 Funding Circle became the first significant peer-to-business lender launching in August 2010 and offering small businesses loans from investors via the platform.[7] Funding Circle has lent over ยฃ1.3 billion as of March 2016.[8][9] Both Zopa and Funding Circle are members of the Peer 2 Peer Finance Association (P2PFA).[10] SOcietyOne โ Australia Peer2peer finance association โ UK Lending Club - US