1. Internet Availability and Financial Services in Indonesia
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Internet user penetration of ~40%, highlighting small internet user base, however, connected ones are highly tech savvy.
With mobile data being extremely cheap (~50% of other ASEAN countries), ~70% of internet users access it via mobile.
Occupying one of world’s largest digital audience of ~150 Mn, spending ~ 3-4 hours on social media every day.
On basis of usage top Social Media Platforms include YouTube (88%), WhatsApp (83%), Facebook (81%), Instagram (80%) & Line (59%).
Majority of population being unbanked, as of 2019 ~40% of population had access to banking services.
Opportunity for e-money brands with major spending on online shopping (84%), buying data vouchers for smart phones (47%), and paying regular bills (28%).
6x growth in number of digital finance apps since 2010, reaching total of 140 apps as of 2019.
2. Growing with 106 Fintech Lending Platforms registered under OJK Indonesia as of April 2019.
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MSMEs have been main pillar behind country’s growth contributing ~60% to GDP (2019), however their development is often hampered with lack of credit opportunities provided by conventional sources
~70% of Indonesian population suffer from Credit Inaccessibility (2018) owing to limited physical outreach (outside Java region). Benefitting from high internet accessibility, fintech lending can be a perfect solution
Leading Banks like Mandiri, BRI, BNI are engaging in partnerships with fintech companies to acquire technological solutions (digital banking, AI & data analytics), e-payment services & reach larger audience.
3. Indonesia Insurance Industry attractive opportunity for investors with low penetration rate & high profitability.
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Insurance Penetration Rate: Indonesia’s insurance market consists of comparatively higher number of policy buyers given its high population.
Bancassurance Leading: According to Indonesia Life Insurance Association (AAJI) Bancassurance continues to be one of the most preferred choices growing at a rate of ~20% (January 2019) owing to the demand from financially literate banked population taking insurance for investment purposes.
Unicorn Partnerships: Leveraging on huge user bases of e commerce platforms & their established payment systems, banks collaborate with them to provide digital pathways to buying traditional solutions. In 2019, Allianz partnered with Bukalapak to provide “touch of a finger” insurance product.
Micro Insurance Products gaining Traction: Providing creative lifestyle focused microinsurance products with smaller premiums & limited coverage scope, these are sold at affordable prices of as low as IDR 10,000. According to OJK, ~22 Mn Micro Insurance policies were sold as of June 2019.
