Indonesia and Australia banking on new fintech links

The Australian fintech community has welcomed a major Indonesian delegation – including 16 companies and the nation’s financial services regulators – to discuss hot topics such as financial inclusion and how to grow a robust fintech industry.

The Indonesian firms, who are active in areas such as peer-to-peer lending, payments and digital investment, have joined senior officials from Indonesian financial regulators OJK (Otoritas Jasa Keuangan) and Bank Indonesia on the three-day tour of Sydney and Melbourne.

It is arguably the most significant group of Indonesian fintech businesses to ever travel to Australia.

This project, chaired by the respective fintech industry associations for Australia and Indonesia, has been designed to build deeper fintech industry connections between the two nations.

Indonesia is emerging as the number two hub for fintech and start-up businesses in South East Asia, with 53 fintech investments projected to be completed in 2017, and US$3 billion of early stage and start-up investment in the year to date.

At the same time, Australia has a vibrant fintech industry, which has grown from around 100 companies in 2014 to just under 600 today. Fintech is now the largest startup sector in Australia, with one in five startup founders targeting the sector.

“Australia and Indonesia have vibrant, complementary fintech ecosystems, but we are only just starting to build the connections between them,” said Danielle Szetho, CEO of FinTech Australia (Australia’s fintech industry association).

“Our two markets are very different, and that actually represents a huge opportunity for innovation if we can work together more closely to help companies understand the contours of each others’ markets.”

Fintech Indonesia Executive Director for Public Policy Ajisatria Suleiman said: “Both countries have the opportunity to benefit from knowledge sharing and the development of strong business connections from this delegation.”

“We know that Indonesian fintech will play an important role to support the country’s growing online transactions economy and to serve its tens of millions of unbanked small businesses.

“There are also specific areas of technology where Australia and Indonesia can collaborate, including in deep tech and cyber security, along with work together on talent exchanges.”

Andy Zain, Managing Director of Kejora Ventures (a Indonesian venture capital investor) said: “I’ve seen first-hand the potential of Australian and Indonesian entrepreneurs to work together to build technology companies – we just need to build more relationships to unlock that potential more often.”

The visit will also focus on financial inclusion, which is seen as a key pillar of attempts to reduce poverty by the Indonesian Government. There are 49 million unbanked micro-enterprises in Indonesia and the fintech sector has been identified as having potential to advance financial inclusion for both business and individuals.

The tour also included a tour of Sydney’s major new startup hub – which is the largest of its type in the southern hemisphere – along with fintech startup incubator Stone & Chalk in Melbourne.

The Indonesian delegates also had the opportunity to learn about Australia’s new $1 billion New Payments Platform (NPP) which allows people to make near real-time and data-rich payments to meet the evolving needs of a 24/7 digital economy. The NPP is due to go live in early 2018.

In April, the Australian Securities and Investments Commission (ASIC) and Indonesia’s OJK signed an agreement to promote innovation in financial services in their respective markets.

This visit is chaired by FinTech Australia and Fintech Indonesia and has been delivered by the Department of Foreign Affairs and Trade, the Australia-Indonesia Partnership for Economic Governance, Austrade, the New South Wales and Victorian Governments, and Stone & Chalk.

Indonesian fintech delegation outside of NSW Parliament