Fintech has great opportunities in the development of the digital economy
Jakarta (ANTARA) - Vice President Ma'ruf Amin has urged ministries and non-ministerial government institutions (K/L) as well as related parties to build financial technology (fintech) governance amid the current technological advancement.

"Financial technology development is a valuable momentum that must be utilized. Indonesia must immediately build a framework for financial technology governance that can help us (keep pace) with the rapid technology development," he remarked in a statement here on Monday.

Amin delivered the remarks at the 2021 Indonesia Fintech Summit (IFS) III, which he joined via video conferencing on Sunday, according to the press statement.

In addition to establishing fintech governance, he also asked all related actors to provide guarantees regarding legal certainty for financial technology activities, including digital financial cyber security, as well as help increase Indonesia's competitiveness as a digital investment destination.

The Vice President said he supports the development of fintech in Indonesia because technology is helping encourage economic activities, especially in the form of electronic money, online loans, and digital banking, in Indonesia.

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"Fintech has great opportunities in the development of the digital economy," he remarked.

This aligns with research conducted by the Institute for Development of Economics and Finance (INDEF) in 2019, which shows the fintech industry's contribution to Indonesia's economic growth was 0.45 percent, he noted.

Earlier, the Ministry of Trade had forecast that the digital economy will grow eightfold from around Rp600 trillion to Rp4,500 trillion, he pointed out.

Therefore, given the potential, all industry players and fintech stakeholders must continue contributing to the development of the national economy, the Vice President said.

Indonesia's digital economy is the largest in terms of value in Southeast Asia, with the total gross merchandise value (GMV) reaching US$70 billion, Finance Minister Sri Mulyani Indrawati said at the 3rd Indonesia Fintech Summit 2021 here on Saturday.

"We all understand that we have tremendous potential," the minister said.

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According to research by Google, Temasek, and Bain & Company, digital payments will continue to grow strongly in Indonesia, with gross transaction value expected to reach US$1.2 trillion in 2025, she noted.

Digital payments dominate the financial technology (fintech) industry in Indonesia, in addition to peer-to-peer (P2P) lending, which, in recent years, has continued to increase, both in terms of the number of borrower accounts, lenders, and the total loan nominal, she added.

According to the Finance Minister, electronic money transactions in Indonesia have continued to increase, rising over 100 times from just Rp2 trillion (US$139 million) in 2012 to Rp205 trillion (US$14.26 billion) in 2020.

"This illustrates that, in less than a decade, there has been an increase of 100 times. So, we are not talking about single-digit linear growth, this is exponential," she remarked.

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Translator: Fransiska N, Azis Kurmala
Editor: Fardah Assegaf
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