Digital Finance's Swift Development

Technology-based financial industry (fintech) is now mushrooming in Indonesia, growing rapidly over a short period of time. As of early 2017, start-up companies in the sector had reached a total number of 160, nearly four times the fourth quarter of 2014. Furthermore, the value of funds in circulation is staggering. This year, fintech transactions are projected to reach US$18.5 billion--around Rp241 trillion. The figure is predicted to increase to US$37 billion, or Rp482 trillion, in four years. Five years ago, the transaction value of fintech companies was still below US$10 billion. The advent of fintech services is helping to accelerate financial inclusion, reducing the number of people whose financing needs have not been met until now, and encouraging growth. On the other hand, fintech has the potential to undermine the conventional finance industry and needs to be addressed proportionately, particularly in regards to consumer protection and risk-mitigation.