Get to know Fintech, one of the innovations in Financial Service

financialtreat – will explain about get to know Fintech, one of the innovations in Financial Service that you will get in the following article. Let’s look at this article carefully!

Financial Service is one of the elements that cannot be separated from modern life. In an age where money is the main need, the existence of financial services is very important and can be said to be a promising business. This is because when the real economy grows, the demand for financial services will also increase.

As the times developed, the development of technology has also become more and more rapid. The impact can also be felt in various sectors including the Financial Service sector. The development of technology in financial services can be seen by the emergence of Fintech.

Basically fintech stands for financial technology, a term that can be used to define technological innovation in financial services in general. The term can be used to refer to products, technologies, and business models in the financial services industry.

get to know Fintech: Understanding Fintech

Definition of fintech according to the World Economic Forum

Fintech is a broad category that refers to the innovative use of technology in the design and delivery of financial services and products. Its application can be found in various business segments including loans, advice, investment management and payments.

Definition of fintech according to Investopedia

Fintech refers to the integration of technology by financial services companies to increase use and service to consumers.

Definition of fintech according to Techtarget

Fintech is the use of new technologies and delivery models to complement the process of delivering traditional financial services.

Definition of fintech according to Bank Indonesia

Fintech is the result of a combination of financial services with technology that changes the business model from conventional to moderate, so as to help buying and selling transactions and payment systems become efficient, economical and remain effective.

Application of Fintech in Companies and the Financial Industry

Please note that not only startups, but banks to large companies also integrate technology in the traditional financial sector to make it safer, faster, and more efficient. Some examples of the types of fintech applie in the financial services industry include:

get to know Fintech: Digital bank.

Digital bank is a new bank ienis that allows users to access banking features through smartphones. There are many features offere such as spending analysis, support for various currencies, smart savings features, cashback to other security features.

Mobile payment

The application of technology that allows any kind of payment to be made through a mobile application. Simply by downloading the mobile payment application and registering, we can make a payment simply by using a mobile phone only.

Robo advisor

Digital-base financial advisors who utilize AI and machine learning technologies to help users manage the profits of fund investments made base on investment amounts, risks, and investment goals.


Insurtech is a collaboration between insurance products and technology to help people access insurance coverage more quickly, easily and affordably. Fintech innovation in the insurance industry to improve efficiency, reduce costs, improve risk assessment and provide a good customer experience. Insurtech usually covers home, car, and data security insurance.

Digital lending and credit

One example of open banking technology that makes it easier for customers to borrow money electronically. Some examples are peer to peer lending and crowdfunding platforms that allow users to get loan funds without the need for traditional bank involvement.

Cryptocurrency and Blockchain

This is one example of other fintech innovations that are later said to offer promising potential to significantly improve various industries. Blockchain uses encryption technology to make the cryptocurrency a promising new medium of exchange because it is safer and better than cash.

get to know Fintech: Fintech in Indonesia

Global investment in the fintech sector has increase by $100 billion since 2010. In 2017, fintech investment rose by 18% with recipients of most startups focuse on payment and lending technologies. Indonesia itself cannot be separate from the development of the fintech industry. In recent years, more and more fintech business model startups have sprung up. In May 2019, there were 249 fintech companies in Indonesia with the two fastest-growing sectors being in the categories of peer to peer lending and electronic payments.

Bank Indonesia’s statistics also state that the value of e-money transactions grew sixfold between 2012 and 2017 to Rp12.3 trillion, while OJK data at the end of 2018 said loans through P2P had reache RP22.67 trillion. Outside of the two types of fintech company models, there are also other types of fintech companies in Indonesia such as aggregators, credit assessments, insurtech, financial planners, and others.

Some examples of fintech companies in Indonesia include:

  • Amartha. The company was establishe in 2010 with a focus on providing P2P lending services.
  • Bareksa. This startup, which was founde in 2013, provides online mutual fund financial products buying and selling services.
  • Gopay. Create to support non-cash payment services in Gojek’s super apps, Gopay is now one of the most popular fintech payment services in Indonesia.
  • I’m Doing it. The financial virtual credit application company founde by William Li and Gordon Hu since mid-2016.
  • KoinWorks. An online P2P lending platform that connects investors with SMEs or individuals seeking loan funds.
  • Halofina. The robo-advisor platform was establishe in 2017 to help users manage personal finances base on their goals.
  • Pintek. Fintech platform establishe since 2018. The focus of the service is to provide special loans to the education sector.

get to know Fintech: Legal basis of fintech in Indonesia

Fintech regulation itself has been inaugurate in Financial Services Regulation No. 77/POJK.01/2016 concerning Information Technology-Base Money Lending Services. In the regulation, it is explaine that fintech is a financial services institution if it meets the requirements in the form of a limite liability company or cooperative.

Limite liability companies or cooperatives are oblige to have personal capital amounting to one billion rupiah when establishe. As for applying for a permit, it is mandatory to have capital worth Rp2.5 billion. The maximum loan limit for fintech is Rp2 billion from the capital previously mentione. We need to know that the provision of new loan capital can be done by fintech after completing the OJK licensing.

get to know Fintech: Benefits of fintech in Indonesia

Fintech is one of the technological innovations that provide many benefits. Some of the benefits of fintech are as follows.

1. Better access to funding

The first benefit of fintech is that it is easier to access funding. These technology services have reache various circles of society. So that it is easier for us to access and understand how to get funding assistance that can support daily activities. If in the past to get funding had to come to the office with files and so on, now it is enough through smart phones without complicate requirements we can get funding.

2. Financial transactions become easier

An important benefit of fintech is to facilitate financial transactions. When conducting various financial transactions, we do not need to bother to go to a bank or ATM. we can access it through smartphones or other devices to complete financial activities. Of course, this is easier than before fintech.

3. People’s living standards are increasing

Mentione earlier the benefit of fintech is that people can get funding more easily. If people get access to these funds, financing financial activities will be better and easier. like getting funding to open a business for example. it will have a good impact in improving people’s welfare and living standards.

4. Support financial inclusion

Furthermore, the benefit of fintech is to support the increasing financial inclusion of the community. Financial inclusion itself is the involvement of the community in conducting economic transactions, such as buying and selling or saving and borrowing.

As we know, before the development of technology as fast as it is now, the share of society in economic transactions is not so large, especially in the savings and loan sector. One of the functions of fintech is to bridge various economic transactions of the community, so that financial inclusion also increases.

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5. Accelerate economic turnover

The last benefit of fintech is that it accelerates economic turnover. Access to finance and easier transactions will support the flow of economic turnover to accelerate. fintech also has a role in helping business actors to get capital with low interest through one of fintech products, namely, online loans. But keep in mind, not all online loans are official and get permission. Do not let us borrow money through illegal online loans because it will actually bring losses instead of profits.

Judging from the development. fintech is one of the sectors that continues to grow rapidly and is considere to be one of the contributors to achieving financial inclusion. however, it is undeniable that the development of fintech in Indonesia is said to still be face with a number of challenges. Such as the risk of money laundering, the phenomenon of winner takes all. So misuse of personal data and much more.

That was the explanation of Fintech which is a technological innovation in financial services. Good luck.

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