This article was contributed by Aidil Zulkifli CEO & Co-founder of UangTeman
The fintech industry has taken off in Southeast Asia at varying degrees in different regional countries. One thing is for sure, everyone in the region is talking about it and fintech is here to stay. Countries such as Singapore are all looking to carve a piece of the fintech cake for themselves. Just last year, the Monetary Association of Singapore (MAS) committed $225m to fintech growth, and Minister in the Prime Minister’s Office Chan Chun Sing has also recently lauded fintech and sees it as a tool for future growth in the republic. Established finance players from conglomerates to banks are all jumping onboard the fintech train, which seems to be headed on a one-way track to success.
Singapore as a B2B fintech market
However, it is not as straight-forward as it seems, especially in a region like Southeast Asia, where there is a large diversity of financial markets that all have their own rules, regulations and cultural sensitivities to contend with. Fintech that aims to primarily profit from and support businesses are great for a mature market environment such as Singapore. The market is already a regional finance hub and it makes sense to invest in Business-to-business (B2B) fintech that would support the development in areas that fuel the growth and innovation of those specific financial verticals.
The emerging markets : the B2C fintech growth
Then there are fintech startups that focus more on individual consumers and effecting change at the grassroots level, which I will classify as Business-to-consumer (B2C) fintech. These work better for large-scale economies in emerging markets. 2 billion people in the world don’t have access to formal financial services, and in this region, Indonesia is a clear representation of this unbanked population – 40% of Indonesians still live below the poverty line or are in danger of falling under it. According to the 2015 Brookings Financial and Digital Inclusion Project Report, the move toward digital financial services will accelerate financial inclusion in emerging markets that often lack established finance systems. Indonesia has seen a wave of fintech startups in the past year and Financial Services Authority of Indonesia (Otoritas Jasa Keuangan) (OJK) has moved to increase support for the industry with the creation of a technology board on the Indonesian Stock Exchange (IDX) to enable financial and technology (fintech) startup companies to list shares on the bourse. There are many fintech startups around Asia striving to make a social impact, and UangTeman is a good example, making a significant impact in Indonesia with its online platform, which gives it the ability to reach out to a large portion of the huge Indonesian population. As a startup, it is also able to work nimbly to meet each individual customer’s needs, and increase the number of financially included within the country.
As fintech is predicted to dominate in 2016, building capacity is important for emerging markets in Southeast Asia
As much as fintech is predicted for great success, it is paramount that all stakeholders must treat the industry with care and to nurture it to its maximum potential. We need the right model and right financial service for each Asian market. If done right, fintech will absolutely change the finance landscape, uproot legacy systems and usher in a new industry era that better serves everybody.
UangTeman is the first online short-term loan service provider in Indonesia with a quick and reliable process. UangTeman strives to answer the need for a bailout in society today. By utilizing advanced technologies, UangTeman provides ease of the process in a simple, transparent, flexible and automated way.