Number of Local Fintech Startups in 2016

The hesitation of the banking system and other financial institutions in disbursing credit after the global economic crisis, coupled with the difficulty faced by the public in obtaining credit, are among the factors that underpinned the emergence of Financial Technology (Fintech). Furthermore, advancements in digital technology have led to a proliferation of Fintech startups.

Based on data from the Financial Services Authority (OJK), the number of Fintech startups throughout 2016 increased almost threefold. In the first quarter, there were only 51 startups, but in the fourth quarter, the identified startups increased to 135. This number does not include Fintech developed by financial institutions, telecommunication companies, or foreign Fintech operating in Indonesia.

Fintech payment remains dominant in the local Fintech market, with 57 startups or approximately 42.54 percent. Meanwhile, based on the year of operation, 77.5 percent of Fintech companies began operations in 2015. The emergence of Fintech has transformed the financial industry model, which was previously monopolized by banks, into a more democratic, transparent, affordable, and accessible alternative industry serving a wider range of consumers.