Know What is Fintech. Definition, Benefits, Types and Legal Basis

Financialtreat – will explain about  know what is fintech. Definition, benefits, types and legal bases that you will get in the following article. let’s look at this article carefully!

Currently, technology in the fields of economics and funding is increasing. In the past, people had to transact directly which of course would take time and energy. Nowadays, almost everything can be done with your hands and your gadget, such as checking deposit interest, transacting online, transferring with mobile banking applications and so on. With fintech platforms, you can do it online without having to interact directly.

Currently, there are also those that are popular with the name fintech platforms or an abbreviation of financial technology. Fintech is very popular among the media and for those who are active in technology. Start-up companies also use fintech when dealing with finance, either transfer or otherwise. So, you could say fintech itself is a combination of technology and financial platforms. For more details, see the following reviews.

Know What is Fintech. Definition, Benefits, Types and Legal Basis

Actually there is no standard definition of fintech. However, according to the National Digital Research Center (NDRC), fintech is a term used to describe inventions in the field of financial or financial services.

It can also be interpreted as financial inventions that are given a touch of modern technology. Or is a segment in the start-up world. The goal is to help maximize the use of technology to transform, sharpen or accelerate various aspects of financial services.

So, starting from payment methods, fund transfers, fundraising, loans to asset management can then be accelerated and shortened by using technology. Based on this, it is natural that fintech will quickly become a necessity that will subsequently change the lifestyle of many people, especially those who are engaged in technology and finance.

What is Fintech?

Fintech is an abbreviation of financial technology which means financial technology. So actually what is fintech is a technological invention developed in the financial sector so that financial transactions can be carried out practically, easily, and effectively.

Fintech Growth in Indonesia

Along with the rapid growth of technology and the growth of startup companies, the growth of fintech in Indonesia will also increase. Indonesia’s fintech technology started in 2006, but unfortunately at that time there were still very few companies in this field.

When the Indonesian Fintech Association was founded in 2015, Indonesian fintech trust began to grow among the population. As a result, fintech companies in Indonesia have developed so rapidly that 140 companies are listed on the OJK fintech list.

It doesn’t stop there, in 2017 sharia fintech has developed again. Sharia fintech is a type of fintech that operates on the basis of Islamic principles. Therefore, the Indonesian Sharia Fintech Association was born which oversees Islamic fintech in Indonesia.

Fintech Legal Basis in Indonesia

The implementation of financial technology in Indonesia has been regulated by the government through the issuance of Bank Indonesia regulations. Further details on the legal basis of financial technology are as follows: Bank Indonesia Circular Letter No. 18/22/Dksp regarding the Implementation of Digital Financial Services. Bank Indonesia Regulation No. 18/17/Pbi/2016 regulates all matters relating to Electronic Money. Bank Indonesia Regulation No. 18/40/Pbi/2016 stipulates the Implementation of Payment Transaction Processing.

Benefits of Fintech in Indonesia

The growth of fintech in Indonesia brings many good effects. The benefits of financial technology are as follows.

Financial Transactions Become Easier

The first point of the benefit of financial technology is that financial transactions become easier. When it comes to making financial transactions, you no longer need to go home or go to the bank to do it. Only through a smart phone, all financial busyness can be completed. Of course this makes it easier for people.

Better Funding Access

Thanks to financial technology , financial technology is growing rapidly to reach various groups of people. This triggers more and more people to know how to get financial assistance to help with their daily activities.

People’s Living Standards Increase

This financial technology benefit point is still related to the previous benefits. After the people get better access to funding, the people can use the funds to finance their consumptive and productive activities. Furthermore, their standard of living and welfare has increased.

Supporting Financial Inclusion

The fourth benefit of financial technology is to help increase the financial inclusion of the population. What is meant by financial inclusion is the involvement of the people in economic transactions, ranging from buying and selling, contributions, to savings and loans. The convenience of financial technology technology has bridged these various economic transactions, so that financial inclusion will increase.

Accelerating Economic Turnover

Fifth, the benefit of financial technology is to accelerate economic turnover. Access to finance and ease of transactions encourage faster and more practical economic cycles. Not only that, fintech helps business people to get capital with low interest through online loans as fintech products.

How Fintech Works

financial technology is one of the sophisticated business fields that integrates financial management, storage, distribution of money, and technology. Therefore, the way financial technology works is complex and branched according to its services to the population.

We take the example of financial technology , an electronic credit provider. The way fintech credit providers work, first of all, is to receive data from the people of credit customers. After verifying data and also providing guarantees to the Deposit Insurance Corporation (LPS) and Bank Indonesia (Bi), the financial technology will disburse funds to the electronic store where the customer applies for credit.

Finally, the e-store will deliver the ordered goods to the customer, based on the fintech mandate. In the end, financial technology will use loan interest to customers in every payment. With this interest, financial technology carry out their operational activities.

Types of Fintech in Indonesia

The growth of fintech in Indonesia has led to the emergence of various fintech product inventions that help financial activities and support the lives of the population. The following are the types of financial technology that have developed recently.

peer-to-peer lending

The first type of financial technology is peer-to-peer lending. financial services that provide borrowing funds for business capital or meeting needs. The existence of this fintech example helps business people to get capital quickly online.

However, you still have to be wary of illegal financial technology such as informal online loans that have the potential to manipulate their customers. Make sure you choose a legitimate online loan. You can see the formal OJK fintech list on the OJK official website.


Crowdfunding is a financial technology product as a system to bring together parties who need funds and donors with transaction collateral in a conducive and easy manner. Crowdfunding is not only used in collecting donations, but also used in developing businesses to find investors and business actors.


The next type of financial technology is a digital wallet, also known as an e-wallet. This fintech product plays a role in providing a place to store money electronically for its users. The purpose of the fintech product in the form of an e-wallet is to make it easier for users to carry out disbursement of funds for transactions in other applications, such as marketplaces, merchant apps, and the like.


Fourth, the type of financial technology is micro finance. Micro finance is a financial technology company service that helps the lower middle class to support their lives and finances through the provision of financial services.

Payment Gateway

The fifth type of financial technology is payment gateway. Payment gateway is a fintech platform that performs payment authorization via online transactions. An example of fintech in this payment gateway is paypal.


As financial technology develops, the investment process can be done easily. Many investment instruments migrate through online applications so that investors can easily invest their capital.

Digital Bank

The last type of financial technology is a digital bank, which is a bank where 100 percent of transactions are done digitally, from account registration to asset management. Digital banks are different from mobile-banking, because m-banking transactions are still related to offline banks, while digital banks are 100 percent electronic.

One example of a financial technology product in the form of a digital bank in Indonesia is One Mobile. Although released by OCBC Nisp, One Mobile is a standalone digital entity, with separate asset management from non-digital accounts. Unless you want to know more, you can try installing the One Mobile application from the Playstore/Apple Store and compare it to a regular OCBC NISP account.

Thus the discussion of the financial technology platform. financial technology is one of the most promising business sectors in Indonesia. One of the best financial technology products today is One Mobile OCBC Nisp. Want to know what makes this digital bank so good? Let’s download the application now on Playstore and App Store, thank you.

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