Observing the Challenges and Regulations of Fintech Services

Based on his experience working at Lazada, MNC Group, and Detik, Andry Huzain became one of the Co-Founders of TunaiKita. Service peer-to-peer (P2P) lending which is part of Wecash Global provides capital loans to prospective borrowers, with funds coming from ordinary people who have more money to lend.

The P2P lending scheme, which is currently increasingly popular in the world financial technology, was the most popular industry in 2017.

"Marketcap [Market capitalization] for fintech services, the numbers are clear and guaranteed to be profitable. In contrast to e-commerce services which are still uncertain. That reason then makes fintech [as] the most favorite industry with bright potential in Indonesia," said Andry.

In this #TuesdayStartup session, Andry Huzain shared his stories and experiences when he started building TunaiKita, a fintech service that has fairly strict procedures and regulations. Monitored and regulated by OJK and BI, fintech services are quite complex and should be carefully considered by potential startup players who want to launch fintech services in Indonesia.

There are four challenges that are often faced by fintech startups in the country, and the following is a summary as conveyed by Andry.

No loyal users

According to a survey conducted by TunaiKita, most users of fintech services are millennials. From the survey results, it can be concluded that most of these users do not have brand loyalty and tend to switch to one fintech service brand. This is something that prospective startups must pay close attention to.

"Another thing that must also be observed is that most users then try to use the selected fintech service, from recommendations from friends, family and closest relatives. Making this business is full of trust factors and of course 'trust', said Andy.

Data verification challenge

Another factor that prospective startup actors must pay attention to if they want to present fintech services is the absence of central database complete in Indonesia. This makes it difficult for startups to quickly verify and confirm prospective user data. This also applies to the provisions virtual signatures. It is still difficult for startups to verify by using virtual signatures, TunaiKita admits that this is a problem in itself.

"Make sure all data center exist in Indonesia. Also pay attention to the issue of ISO certification to SNI which must be clearly known by fintech startup players," said Andry.

Payment gateways

In Indonesia, all funds channeled, from e-commerce services to P2P lending, must be deposited in an account escrow or Virtual Account first. The regulations set by the regulator are sometimes quite difficult to disburse funds quickly to customers Actioncalendar to borrowers. For that make sure clearly the time limit until the provisions (limit date) for each applied transaction. Do not let the process that is quite time consuming damage the process of the procedure to be chaotic until it is hampered.

Selection of the right talent

Another important thing that prospective startup actors must pay close attention to is the selection of talent that is quite crucial. Andry said there were four skill a must-have for startup employees. They include legal compliance, technical, business analyst, and banking accounting.

"The ideal again is to recruit employees who have two abilities at once. That way you can get a complete set of talents and help startups run their businesses," said Andry.