The acceleration of digitalization in Indonesia is affected by the Covid-19 pandemic that hit. Since the pandemic hit, all aspects in Indonesia have begun to shift to the digital world. In fact, according to a World Bank report, business adoption of technology in Indonesia is the highest in the world.
According to the report, 81% of businesses in Indonesia have adopted technology in line with the Covid-19 pandemic. Domestic internet penetration only reached 48% in 2019. Meanwhile, the percentage of businesses in lower-middle-income countries that have adopted technology is on average 39%.
Indonesia is one of the countries in this income group. In countries with upper middle income, the percentage is recorded at 34%. Gabon is the country with the highest business adoption of technology in this group, at 77%.
Digitalization must be balanced with financial awareness
Financial educator and Co-Founder of Thirty Days of Luch Podcast Fellexandro Ruby said digital technology adoption must be followed by a financially literate generation, especially since Indonesia will get a demographic bonus in 2030.
“Don’t let it happen, because it’s not followed by an understanding of managing finances, instead of being a demographic bonus, it’s a demographic bonus,” Ruby said during a virtual discussion with Kredivo on Friday.
Based on Nielsen’s research, Ruby explained that in general, Indonesia’s financial health score stands at 37 while Singapore’s 61. So, according to him, this gap needs to be pursued.
In addition, continued Ruby, only 2 out of 10 Indonesians have emergency funds. Ruby considered this very dangerous considering that an emergency fund should be the most basic thing in financial planning.
“We also have a habit of debt. Going back to Nielsen’s research, only half of the people who have credit cards with an income of Rp. 10 million pay (bills) in full. The rest, they only pay the minimum amount,” he continued.
Therefore, Ruby emphasized the importance of today’s young generation to improve their knowledge of financial management. Moreover, nowadays, access to this knowledge is very easy thanks to digital technology.
“If the younger generation understands the use of loan products, investments, and various other types of financial services from an early age, they can build mature financial planning habits during the advancement of the digital finance industry,” concluded Ruby.