Webinar on “Fintech Adoption in Indonesia: Patterns, Constraints and Enablers”

In this webinar, Dr Siwage Dharma Negara, Dr Astrid Meilasari-Sugiana and Mr Manggi Taruna Habir discussed the result findings of an online survey conducted in Indonesia on Fintech adoption during the pandemic.  


Tuesday, 24 May 2022 – Dr Siwage Dharma Negara (Senior Fellow and Co-Coordinator of the Indonesia Studies Programme, ISEAS – Yusof Ishak Institute) and Dr Astrid Meilasari-Sugiana (Senior Lecturer, Universitas Bakrie’s Political Science Department and Visiting Fellow, ISEAS – Yusof Ishak Institute) spoke in a webinar titled “Fintech Adoption in Indonesia: Patterns, Constraints and Enablers” held by ISEAS. Mr Manggi Taruna Habir (Independent Commissioner of PT ABM-Investama Tbk, PT Berdayakan Usaha Indonesia & PT Adira Dinamika Multi Finance Tbk) spoke as a discussant for this webinar. Moderated by Dr Maria Monica Wihardja (Visiting Fellow, ISEAS – Yusof Ishak Institute), Dr Siwage and Dr Astrid elaborated on the fintech usage patterns observed among end-users of fintech services in the Greater Jakarta areas, the motivations behind the adoption of these services and the challenges faced across various demographic and socio-economic groups. 

Dr Siwage Dharma Negara and Dr Astrid Meilasari-Sugiana shared in detail the result findings of the online survey conducted on fintech adoption among Indonesians in the Greater Jakarta region. Mr Manggi Taruna Habir also shared his insights on the result findings and how fintech perceptions changed over the past two years during the pandemic. The session was moderated by Dr Maria Monica Wihardja. (Credit: ISEAS – Yusof Ishak Institute)

Dr Siwage began the presentation by sharing the background of this research study, drawing references on how the fintech industry has become increasingly popular during the pandemic due to higher penetration of mobile phone usage, especially among the younger population in Indonesia. Apart from that, the increased convenience and other features of fintech such as confidentiality of transactions had also made it highly attractive to use fintech services among Indonesians. Dr Siwage proceeded to describe the survey, highlighting that a total of 3,157 respondents were surveyed in 2021 using a non-probability sampling method. Many of the respondents were from the Greater Jakarta region and results obtained from this region were used for subsequent analysis. Dr Siwage justified this choice, highlighting that the Greater Jakarta region generally has higher economic activities, better internet connectivity and a higher concentration of well-informed individuals who use fintech services, making it suitable to observe certain patterns. The general breakdown of the respondents’ profiles was also elaborated, with a higher proportion of respondents being females and from the millennial generation.

In terms of the types of fintech services, a higher proportion of the respondents used e-wallet services, followed by mobile/internet banking. As for the preferred mobile banking service, BCA was identified to be the most widely used mobile banking platform across income groups. That being said, among the lower socio-economic group, another banking platform, BRI, was also identified as another preferred choice among end-users. In terms of usage duration, m-banking was highlighted to have the longest usage duration while new fintech services such as online lending and investments apps were mainly explored during the pandemic.

Dr Astrid proceeded to elaborate on the reasons why people use fintech services. Across socio-economic groups, the purpose of using fintech services was quite similar, mainly for fund transfers especially to family members, business transactions as well as social and community transactions. For businesses such as small & middle enterprises (SMEs), fintech services were mainly used to accelerate business opportunities so that they could attract new customers. Dr Astrid however argued that the motivations for using fintech were still centred around consumer purposes and not enough for business production. Apart from that, the two main obstacles highlighted were the risk of personal data leakage and fraud. Interestingly, only a small number of respondents felt that fintech services were difficult to use. Dr Astrid, therefore, believed that the Indonesian government have done well in advocating the use of fintech services, at least among users in the Greater Jakarta areas. That being said, there is still a need to increase awareness on how to safeguard consumers against potential risks.

Dr Astrid continued to highlight key patterns across socio-economic groups, identifying that higher socio-economic groups tend to use fintech services more for online shopping and other activities. A significant proportion of lower-income groups still preferred cash payment despite the growing use of fintech services for such activities. In fact, for businesses, bank transfers were still preferred over fintech as they are viewed as a more formal mode of transaction. Dr Astrid also found a slight difference between SMEs and large enterprises, where SME owners tend to prefer ‘cash on delivery’ as a mode of transaction while large enterprises preferred bank transfers, primarily due to the presence of receipts for documentation. As for other activities such as payment of monthly utility bills and donation payments, fintech services were more favoured across socio-economic groups.

While fintech is increasingly becoming the preferred mode for transaction, some activities such as insurance claiming, loan payment, payroll and saving investments had shown patterns where bank transfer and cash payment are still preferred choices over fintech services. Dr Astrid highlighted that much of the lower-income groups still preferred bank transfers as they are viewed as a more reliable method, especially when payments are related to their life-long savings. Even though that is the case, there is a shift toward fintech usage, and this was reflected in the survey where most respondents across socio-economic classes felt that they were keeping up to times if they use fintech services. Dr Astrid, therefore, believed that there will be a continual growth in using fintech beyond payment activities and this would improve with increased digital literacy and familiarity.

As a discussant, Mr Manggi first acknowledged the importance of this survey as the last survey on fintech was conducted in 2020, just at the start of the pandemic. With this survey taking place almost 2 years into the pandemic, it would give some insights into the effects of the pandemic on fintech usage. Based on that, Mr Manggi shared some similarities and differences that he observed between the two surveys. Similar to the previous survey, e-wallets had been used more frequently for small purchases while large purchases were usually done through bank transfers. Lack of stable internet connectivity was also identified to be one of the key obstacles to using fintech in the previous survey. Some differences that arose from this survey would be the use of fintech for saving, investment and social transactions. Apart from that, people’s perception of fintech had also changed and using fintech services is now viewed as being cool among the general population. Mr Manggi, therefore, posed some questions to the speakers, looking specifically at the willingness of consumers to give away personal data, the maximum cost a user would pay for fintech services and the differences in people’s preference toward fintech services provided by big banks verse small and middle-size banks.

The webinar drew an audience of 57 participants from both Singapore and abroad. The panel then discussed a range of topics during the Question-and-Answer segment which included topics such as possible areas of expansion of fintech usages, the effectiveness of a complementing policy for fintech expansion, the possibility of increasing financial and digital literacy among the population, the management of data fraud and leakages, cross-border data flows, the emergence of a super app and the effectiveness of using promotion/discount as a motivation for fintech usages. Both speakers and discussant also shared some concluding remarks on the continual usage of fintech services in the post-pandemic era.