Indonesia’s economy finds itself in a peculiar position today.
While the economy has experienced a high rate of growth (averaging 5 per cent in annual GDP growth), the income gap between the rich and poor has been on a constant rise.
A 2015 report by the World Bank showed only 20 per cent of Indonesia’s population benefited from the country’s economic growth in the last decade. Meanwhile, the remaining 205 million people were left behind.
This has resulted in Indonesia having one of the highest wealth concentrations worldwide, with the top 10 per cent of the population (by income) owning 77 per cent of the country’s wealth.
Since then, the government - through the financial services authority / Otoritas Jasa Keuangan (OJK) - has been working hard to address this increasing financial divide.
Through a series of multi-year plans targeted at increasing financial literacy, authorities managed to raise the financial inclusion rate to 76 per cent in 2019, up from 67 per cent in 2016.
Despite the encouraging improvements made, there is still room for improvement and hurdles to overcome.
Helping the unbanked
Indonesia is still home to around 47 million underbanked and 92 million unbanked adults.
To put these figures into context, about half of the population lack (underbanked) or do not have (unbanked) access to financial services provided by banks.
This has created a huge opportunity for fintech companies in Indonesia.
By eradicating the need for physical branches, these companies can bypass geographical constraints and reach consumers in rural and remote areas (which make up the majority of unbanked and underbanked).
Acting as a financial equaliser of sorts, fintech companies can provide alternative financial services such as loans and insurance that cater to this large, but often overlooked, group of consumers.
We help fintechs make this possible
According to the Indonesian Fintech Association (AFTECH), there are currently 362 registered fintech companies within the country.
With lending (50 per cent) and payments (23 per cent) forming the bulk of these companies, there is a wide range of digital financial platforms for consumers to pick from.
Although this incentivises fintech companies to provide consumers with competitive prices and services, it creates a larger problem for both parties.
Financial data of consumers are stored in silos across different platforms. This results in consumers and companies being unable to leverage it to their respective advantages.
However, Finantier solves this problem with our API platform based upon the principles of Open Finance.
Open Finance is a framework built on top of Open Banking principles where consumers can securely access and use data they generate across multiple platforms to make the most of it.
By facilitating the exchange of financial data across different platforms, we enable fintech companies to build financial services that can easily reach the unbanked.
So, how do we enable that to happen?
By providing fintech companies with financial data that can accurately verify the identity and income history of their unbanked users, we allow the unbanked to access the same financial services as their banked counterparts.
For instance, a gig worker would have previously been ineligible for a loan due to his lack of income history.
However, with Finantier’s APIs, lending platforms can access the income history of the worker on their gig working platform and access his true ability to repay before extending the loan.
Besides unlocking a new group of users for fintech companies, we help democratise access to financial services by allowing the unbanked to utilise these services to improve their standard of living.
Imagine how vital an education loan for attending university could be for families residing in the rural villages of Indonesia.
Managing their finances better
Besides levelling the field for access to financial services, we also enable consumers to have a better understanding of their financial health.
Previously, with financial data scattered across multiple platforms, it was difficult for an individual to track their daily cash flows.
Now, Finantier’s platform enables personal finance apps to accurately provide a real-time personalised financial report to its users.
By aggregating financial data from a wide range of platforms, we enable these apps to provide a dashboard where users can monitor their cash flows and investments, down to the transaction level.
Through analysing these data and generating insights, we also allow these personal finance platforms to provide tailored financial advice to help their users manage their finances better.
For consumers, especially those unbanked, the ability to track their finances will be a welcomed aid in reducing expenses and for future financial planning.
What we believe in
Our role in accelerating financial inclusion lies in tandem with our mission of creating a world where anyone can access financial services.
If you are a fintech company looking to reach the unbanked and act as a financial equaliser for 139 million unbanked Indonesians, speak to us today to find out how we can work together to make your vision a reality.
Together, let us create an inclusive financial ecosystem in Indonesia where anyone, anywhere can access the necessary financial services to help improve their overall wellbeing.