Digitalization has penetrated various sectors of Indonesian people’s lives, including the business or fintech sector. According to the Minister of Communication and Informatics, Johnny G. Plate, there are at least five main fintech segments that dominate Indonesia.
The five segments are neo-banking, alternative financing, digital assets, digital investments, and digital payments. The five segments cover around 73 percent of the total fintech market in Indonesia in the 2022 period.
Meanwhile, Johnny explained that the asset digitization and digital investment segments will have the potential to remain the two main growth pillars for the Indonesian fintech sector with a CAGR of 25 percent and 22 percent respectively from the 2022 – 2025 period, according to the prognosis of the Statistics study.
“For this reason, the presence of fintech innovations such as decentralized finance which includes cryptocurrency, crypto assets, and non-fungible tokens [NFT] in the digital asset segment as well as robotvisors and neo brokers in the digital investment segment need to be continuously anticipated by financial service sector players in Indonesia going forward. ,”
Furthermore, he considers that geopolitical conflicts, scarring effects after the Covid-19 pandemic, to conditions of stagflation are not only substantive reference contexts but also have an impact on the occurrence of tech winter in the world’s digital economy sector.
This can be seen from the downward trend in the flow of digital startup funding in the Asian region by 60 percent on an annual basis (year-on-year/yoy) and 33 percent quarter-to-quarter (qtq) in quarter III/2022.
Nevertheless, Johnny said that the transaction value of Indonesia’s financial technology (fintech) sector at a compound annual growth rate (CAGR) is 39 percent. Johnny revealed that this score was the second-highest score among the G20 countries during the Covid-19 pandemic until this year.
“This superior performance shows that Indonesia can respond progressively to the Covid-19 pandemic as a momentum to accelerate the digitalization of the financial services sector in Indonesia,” Johnny said at the ‘Closing Ceremony of the 4th Indonesia Fintech Summit & National Fintech Month’ on Bank Indonesia’s YouTube channel, Monday (12/12/2022).