Rise to the challenge?
Rise to the challenge?
London, UK – 14 June 2024 – ASEAN’s booming fintech industry took centre stage at a special forum held in conjunction with London Tech Week (LTW) 2024. The forum, co-hosted by the Indonesia Chamber of Commerce and Industry (KADIN Indonesia) and ASEAN Business Advisory Council (ASEAN-BAC); in collaboration with Indonesia’s FSA (OJK), UK Government, Indonesia Fintech Association (AFTECH), and Equatorise; supported by Indonesian Embassy in London, UK-ASEAN Business Council, BritCham Indonesia, TechUK, and TheCityUK, explored the future of financial technology in Southeast Asia and showcased two key initiatives designed to accelerate the region’s digital transformation.
Southeast Asia’s Digital Boom
Driven by widespread mobile phone adoption and a rapidly growing middle class, Southeast Asia’s digital economy is experiencing explosive growth. Indonesia, the region’s largest economy, is at the forefront of this digital revolution. With a population of nearly 300 million and a GDP exceeding US$1 trillion, Indonesia boasts a thriving fintech scene with over 2,000 startups – half of Southeast Asia’s total. This growth is fueled by a large unbanked population and a government actively promoting fintech to bridge the financial gap.
Forum Highlighted Key Projects
The forum showcased two flagship projects launched during Indonesia’s ASEAN chairmanship in 2023:
The forum convened high-level figures from the region, including representatives from Indonesia’s financial regulator (OJK), the Indonesian Ambassador to the UK, and industry leaders from across Southeast Asia and the UK.
Agusman, Member of the Board of Commissioners at the Indonesia FSA (OJK), stated:
“The latest trend in financial inclusivity in Indonesia and ASEAN has been significantly driven by the fintech and digital finance industries. Over the past few years, these sectors have played a crucial role in accelerating financial access and inclusion across the region.
Given the current global macroeconomic trends, our top priority at OJK is to ensure stability and growth within the financial sector while fostering innovation. Firms in the digital finance industry can spur socio-economic growth by leveraging technology to provide accessible and affordable financial services, thus driving economic inclusion and development.
There are ample opportunities for collaborations and partnerships between the UK, the EU, and ASEAN to enhance our digital finance industry. These collaborations should focus on knowledge sharing, policy alignment, and joint investments in fintech and cyber technologies, which are crucial for the sustained growth and development of our financial ecosystems.'”
H.E. Desra Percaya, Indonesian Ambassador to the UK, Ireland and IMO emphasised the significant role of high mobile penetration rates across ASEAN, noting that smartphone usage exceeds 70% in many countries. This widespread mobile adoption, he observed, creates a favourable environment for the rapid implementation and acceptance of digital financial services. Percaya highlighted that the accessibility and convenience of smartphones enable a broader segment of the population to participate in the digital economy, bridging the gap between the banked and unbanked. He underscored the potential for mobile technology to revolutionise financial inclusion, drive economic growth, and improve the quality of life for millions across the region. Furthermore, Mr. Desra called for ongoing collaboration between governments, industry stakeholders, and international partners to harness the full potential of mobile technology in transforming financial services.
In his special address, Prof Michael Mainelli, Lord Mayor of London highlighted recent advancements and the future trajectory in digital finance and fintech within the City of London and the broader UK, emphasising efforts to enhance public financial access. He discussed London’s pivotal role as a global financial hub, particularly within the realms of fintech and digital economies, despite prevailing global economic challenges. Furthermore, he underscored the importance of collaborative efforts to bolster UK-ASEAN partnerships, focusing on policies and investments in fintech and cyber technologies.
Lord Ed Vaizey, Chair of UK-ASEAN Business Council pointed to the World Bank’s report revealing that around 290 million adults in Southeast Asia remain unbanked. He highlighted the immense potential for fintech solutions to address this gap by offering financial services to a substantial segment of the population. Vaizey emphasised that the unbanked population represents not only a significant challenge but also a tremendous opportunity for innovation and growth within the fintech sector. By leveraging technology, fintech companies can create inclusive financial systems that empower individuals and drive economic development. Vaizey also stressed the importance of regulatory support and public-private partnerships to ensure these solutions reach those who need them most.
Miles Celic, CEO of TheCityUK: ““ASEAN comprises countries with diverse markets, cultures, and regulatory environments. This diversity presents both opportunities and challenges. While it allows for a wide range of innovative solutions tailored to specific needs, it also requires navigating complex regulatory landscapes and cultural differences. The region is experiencing rapid economic growth, with rising incomes and expanding middle classes. This economic dynamism attracts investors looking for high-growth opportunities. However, maintaining this growth requires continued investment in infrastructure and education.”
Bernardino Vega, Vice Chair of International Affairs at KADIN Indonesia, Alternate Chair of ASEAN-BAC Indonesia, and CEO of AdaKami highlighted that Micro, Small, and Medium Enterprises (MSMEs), which comprise over 97% of all enterprises in ASEAN, frequently struggle with accessing traditional banking services. He pointed out that fintech can play a crucial role in bridging this gap by providing digital banking and alternative lending platforms. Additionally, he discussed the growing prevalence of digital payments in ASEAN, noting that they now account for more than 50% of all transactions. Using Indonesia as an example, he mentioned the rapid increase in e-wallet transactions, which have seen a compound annual growth rate of over 30%, and the payment segment in Indonesia boasts over 60 million active users with an expected annual growth rate of 26% from 2020 to 2025.
Budi Gandasoebrata, Secretary General of AFTECH; Group Head Compliance – Payments and Financial Services at GoTo: “Leveraging AI to provide personalized financial services and enhance user experience. AI can assist in credit scoring, fraud detection, and customer service, making financial services more efficient and accessible. Strengthening cybersecurity, enhancing efforts in financial literacy to help users make informed decisions about their finances, building strategic partnerships with other fintech companies, banks, and financial institutions to create a robust financial ecosystem. By focusing on these areas, AFTECH aims to continue its leadership in digital finance, ensuring that services are not only innovative and convenient but also secure and reliable for all Indonesians.”
Ivan Kinash, CEO and Co-Founder of Licel: “Our innovations are shaped by a deep understanding of our users’ needs. We actively listen to feedback and monitor emerging threats to ensure our solutions address real-world challenges effectively. We believe in the power of collaboration. By working closely with industry partners, academic institutions, and cybersecurity communities, we share knowledge and best practices, which helps us refine our innovations, like our discussion today.”
Fridtjof Berge, Co-founder & Chief Business Officer at Antler: “We actively work on building a robust ecosystem by fostering collaborations between startups, established tech companies, academic institutions, and regulatory bodies. This collaborative approach creates a supportive environment for innovation and growth. ASEAN has a young and increasingly tech-savvy population, driving the adoption of digital technologies. This demographic trend is a significant advantage, creating a large and growing market for digital finance and other tech innovations.”
Steven Marcelino, Vice Chairman of UK-Indonesia Bilat Committee at KADIN Indonesia; Managing Partner and CEO of Equatorise: “Indonesia’s fintech landscape is booming, driven by increasing digital penetration and positive investor engagement across this high-growth nation of nearly 300 million citizens. This is a market with huge fintech potential, with large underserved and underbanked populations, low access to finance in MSMEs, and an open and encouraging government dialogue about leveraging fintech capabilities to bridge the financing gap. The number of fintech players in Indonesia increased six-fold over the last decade, rising from just 51 active players in 2011 to 334 in 2022.”
A Catalyst for Collaboration
The forum, which drew over 100 business leaders and investors, served as a platform for fostering collaboration between the UK and ASEAN’s burgeoning fintech industry. By connecting stakeholders and showcasing innovative projects, the forum aimed to accelerate the growth of ASEAN’s digital economy.
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