We are back with kopi chat deep dive series on October 26th! If you’re interested in the development of Fintech scene in Indonesia, this event is for you! We will hear updates and perspectives from the industry experts on how technology has shaped the financial industry, what opportunities lie for startups, and how corporations can keep up with the transformation as well as perspective from the law and permit point of view

1. Kopi Chat Deep Dive Takeaways
Financial Technology
26th October 2017

2. Our distinguished panel (from left to right): Alvin Taulu, Head of Fintech Licencing at OJK; Adrian Suherman, CEO of
OVO; Stanley Wang, Managing Director at K2 Venture Capital; Danu Wicaksana, CEO of TCash; Agung Nugroho,
Co-founder and COO of Kudo and Susli Lie, Co-founder of Dana Cita (Moderator)

3. “The banking markets here are not as mature as they are in the other
advanced economies. There are a lot of gaps in the map of the addressable
market. This is the opportunity that the Fintech startups are focusing on.”
Stanley Wang, K2 Ventures
“Consumer behavior is changing. The way I see it, when things are coming, they
come so fast that we don't realize it and can't prepare for it. It's one of the scary
parts of groups like us who have been in the consumer business for some time,
which is why it's critical for us to address the needs of the consumers.”
Adrian Suherman, OVO
“Through technology and fast information exchange, receiving approval for
loans is much faster now. That's why fintech focused on crowdfunding and
lending are emerging right now.”
Agung Nugroho, Kudo
Uptake of Indonesian Fintech

4. “Fintech is booming now because they don't want to take collateral. Fintech
uses scoring right now; trust. The mindset of people are changing now to
value honesty and integrity.”
Alvin Taulu, OJK
“64% of Indonesians are unbanked or underbanked. 83% of transactions in 2016
happened in cash. That's the opportunity. Additionally, when we see that other
countries have done it, we want to do it too. When our kids see us doing it, they
continue to do it as well. This chain of behavior causes the boom in Fintech.”
Danu Wicaksana, TCash
Uptake of Indonesian Fintech

5. “China is undisputedly the leader in Fintech. They have about 12,000 VC
fund managers managing 19,000 funds. I just can't begin to grasp how to
invest in that kind of environment. Simply because of the scale of startups
and investors, you have this incredibly competitive and rapidly developing
ruthless environment that only the most robust technologies and standards
emerge. If we see the chinese market adopting QR code as the default
interoperable payment standard, then we're not gonna bet against it."
“A lot of things will be quickly commoditized. Things like payments and
wallets will eventually not be significant value added. Investors have to
project a couple of years in the future and figure out where the real value is.”
Stanley Wang, K2 Ventures
Is Fintech 101 what we should be
focusing on?

6. “Most of Indonesia is still cash-based, (and) cash does not recognize digital
records of transactions. Digital records are very important for creating more
things; something as simple as credit scoring. The portion of cash based
transactions is still high, which is why it's hard to move into things like AI. The
market for bitcoins and other crypto isn't there yet, but maybe it's possible to
leapfrog there, we don't know yet. Indonesia is focusing on traditional
financial services, but making them digital."
Agung Nugroho, Kudo
Is Fintech 101 what we should be
focusing on?

7. “Changing behavior is not easy. It is difficult, requiring money and time. That's why a
lot of Fintech 101 is wiring the behavior. There are two ways you do something; you
either drastically change it or you wire the behavior. The ecosystem itself is a
limitation, if we compare Indonesia to US, modern retail is not there yet.
Adrian Suherman, OJK
“(Thailand) is taking a top-down approach. The government is pushing every
financial agency to adopt a cashless economy. It is the only country where,
Mastercard, VISA and UnionPay agree on a single QR code standard. That
standard is now also being adopted by every digital payment form. The government
wants to transact exclusively digitally next year.”
Stanley Wang, K2 Ventures
Is Fintech 101 what we should be
focusing on?

8. “Talking about leapfrogging and the future of technology, we at OJK already
provide the roadmap for this. Our dream is to build up Indonesian Fintech.
The door opens at Fintech lending. Why? Because lending is the first one
with a clear, agile and flexible regulation. At this point, OJK is focusing on
KYC / Digital signature and credit scoring information.”
“OJK wants to bring everyone through this pilot project; the country will lend
money to fintech lending. We will sell 'obligasi retail' / government bonds to
them. OJK-licensed lenders can become primary dealers for ORI and will be
lent up to 30 trillion Rupiah.”
Alvin Taulu, OJK
Is Fintech 101 what we should be
focusing on?

9. “We're looking to position ourselves to buy all these debt obligations. If you're
looking at an area that will grow regardless of what happens in the ecosystem, the
'garbage collectors' are going to be an area that will grow.”
Stanley Wang, K2 Ventures
“I was from ecommerce, and it was bloody to say the least. A lot of money was burned,
including investor money. Similarly in Fintech, I don't know how we can include more
people into the digital economy in a more sustainable way; not only for customers but
also for the industry players, investors and country.”
Danu Wicaksana, TCash
“Source of truth for comparison. For example, obtaining KTP data connecting to CAPIL
(Ministry of Residence) is very difficult. If you’re not a bank, just connecting to have a
source of ID card truth is very difficult. lots of Fintech companies are trying to create
another type of scoring, but at the end of it, there's no source of truth.”
Agung Nugroho, Kudo
Fintech in the Near Future

10. “You're right, this market is going to get bloody very very soon. I just think that we
have to move fast as players. Chinese and American players are coming in. It's a
matter of speed and team composition. Talent in Indonesia is super difficult to find,
there's going to be poaching left and right. It's already happened in ecommerce, and
it's going to happen here quite soon.”
Adrian Suherman, OVO
“Once a fintech lender has a license from OJK, just bring the paper to the CAPIL
and you can get access to the information. Now, OJK has 23 Fintech lenders who
have registered. Every month at least, we bring them to a coordination meeting with
CAPIL, corporate ministry, and BI to leverage your penetration. Now, OJK is
interested in internal affairs; coordination meetings, and socialization. Next year will
be focused on penetration. OJK will push Fintech lenders that this is the best tool for
financial inclusion.”
Alvin Taulu, OJK
Fintech in the Near Future

11. “There is always opportunity, it's just that people are very attracted to success
stories. When people see these, they want to copy them and use the same model.
Oftentimes it does not work out. If you open your sights a little bit wider, there's no
shortage of really interesting opportunities.”
Stanley Wang, K2 Ventures
“When we look at fintech, we can't just look at payment. It's just one piece of many
things. To be honest, when we talk about payment, it's about creating the ecosystem,
the habit and behavior. If you don't have a deep pocket, I would advise to not do
payments. Let the big guys build the infrastructure and ecosystem. There's a specific,
unique vertical that you can build on top of the infrastructure.”
Adrian Suherman, OVO
Fintech in the Near Future

12. “As industry players, we think it's very positive for the country. It allows us to do a lot
of things that have happened in Thiland for example. Interoperability with QR codes
and so on. Of course there are plus and minuses. Some of us have acquired
100,000 merchants, some have acquired 10,000 but it's going to be open for
everyone now.”
Danu Wicaksana, TCash
“In general, it's very positive. One thing I can see in INdonesia is that the market is
really fragmented. And the fragmentation makes people unable to do anyhting. Banks
and telcos each have their own territory. With the NPG, the interoperability makes
things work better.”
Agung Nugroho, Kudo
National Payment Gateway of Indonesia

13. “Currently, there are 26 companies given by the BI for server-based e-
money. 7 of those are card based e-money. With 26 systems in the market,
you are expecting consumers to have 26 applications for payment. It's just
impossible. In order to accelerate acceptance of digital e-money, this just has
to happen. The competition is not between e-money players, it's between e-
money and cash.”
Adrian Suherman, OVO
National Payment Gateway of Indonesia

14. “TCash's endgame, OVO's endgame and Kudo's endgame are all different. OVO
comes from a very big retail player, we come from a big telco player. Each of us has
different models and calculations. I have a strategy in the end that the investment up
front can be compensated with the return at the end of the day. You have to have
use cases and infrastructure from the morning to the evening of your company life.”
Danu Wicaksana, TCash
“Acquiring merchants and users are only activities towards the main business model.
Sustainability depends on scale and the model. The titans have a lot of ammunition, so
it might seem sustainable. For early startups, sustainability is a big question if you want
to do the 'me too' strategy that the titans are doing.”
Agung Nugroho, Kudo
Customer Acquisition Sustainability

15. “Their speed and aggression, that's what we can learn from them."
Adrian Suherman, OVO
“If you ask me what we can learn, we can see very clearly it's gonna be big 2 or big 3
who are going to be the biggest players in the market. If you are a small player with
limited capital in the bank, I will suggest that you need to think twice. At least in the
space of payment, it needs a lot of investment up front.”
Danu Wicaksana, TCash
“That's a holy grail question. Engineering and scalability. There are only a few parties
that can handle billions of transactions every single day. Additionally, how they are
building sales forces, executing operations and engaging merchants. Lastly, how to
manage and benchmark cost of acquisition as well.”
Agung Nugroho, Kudo
Lessons from India and China

16. “If you listen to all the questions and what people have identified as problems, those
are actually the interesting things to look at from a startup standpoint. Focus on the
problem and there is an opportunity.”
Stanley Wang, K2 Ventures
“I want to invite all youngsters to join the industry. It's very dynamic and bright, a lot of
things to learn. Don't think too far into who's going to win and whatnot. There are a lot
of things we can learn together here.”
Danu Wicaksana, TCash
“I think creating products that are really relevant to people is the key for fintech
especially payments. At the end of the day, the product must be able to be absorbed by
the non sophisticated people. Really understand them and make the product relevant
for them.”
Agung Nugroho, Kudo
Closing Thoughts

17. “Don't be afraid, please be involved. Fintech gives a very big opportunity for
businesses and learning. Also I would really like to invite young Indonesians to
please think creatively. Just join and be involved in this industry. And finally show
your love for Indonesian products.”
Alvin Taulu, OJK
“All of us are very fortunate to live in this era. In the next three to five years, I believe
there will be a huge change in the landscape of financial services in Indonesia. All of us
here have the opportunity to really pick the area you want to be in and pushing for
growth in this industry. This is a very exciting time.”
Adrian Suherman, OVO
Closing Thoughts

18. Kopi Chat Deep Dive Takeaways
@Block71 Jakarta
A special thanks to everyone who attended
Kopi Chat @BLOCK71 Jakarta and made the
event possible!
26th October 2017