22/5/2021 Industry Study: Fintech in Indonesia and How Kredivo Boosts Conversions by 40%

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Industry Study: Fintech in Indonesia and How Kredivo Boosts Conversions by 40%

By Akshatha Kamath UPDATED: 30 March 2021 5 Min read

According to the World Bank’s Global Financial Inclusion Index database, Indonesia has made rapid progress in

nancial inclusion across East Asia and the Paci c. The country has come a long way from just 20% of the adults

owning an account in 2011 to 48.9% of the adults owning an account in 2018. While the country still grapples with

the challenges of the unbanked population, it has led to the growth of Fintech companies.

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Source: Fintech Singapore

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The Fintech Landscape in Indonesia

Indonesia has 167 Fintech companies that o er payment, lending, personal nance, crypto and blockchain,

crowdfunding, Insurtech, and PoS services. The Fintech industry is regulated by two entities - Bank Indonesia and

Otoritas Jasa Keuangan (OJK). While Bank Indonesia oversees the monetary policies, OJK takes care of P2P

Lending, Crowdfunding, Digital Banking, data security, Insurtech, and consumer protection.

According to the Fintech Indonesia Report 2018, payment and lending form the major part of the Fintech

ecosystem.

Source: Fintech Indonesia Report 2018

The Growth Story of Fintech in Indonesia

As the Government pushes for nancial inclusion among its citizens, Indonesia is also a witness to the growth story

of the Fintech companies. With over 167 companies operating in Indonesia, the Fintech market has grown by 16.3%

with total investment in Fintech companies reaching $176.75 million in 2017 alone.

Here are a few factors that are responsible for the growth story of Fintech in Indonesia.

Technology-enabled population: With a population of 261.12 million, the majority of them being below the age of

35, technology is a key enabler for Indonesians. Over 143.2 million people have access to the internet, and mobile

subscriptions are as high as 415.7 million. This has contributed to the growth of Fintech companies.

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factor responsible for the popularity of Fintech companies is the topography of Indonesia.

Indonesia is an archipelago country made of 17,000 islands spanning across 50,000 kilometers from east to west.

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As banks face a challenge in reaching the most remote areas, Fintech companies are helping the Government meet

its nancial inclusion goals by o ering nancial solutions in every nook and corner of the country.

Easy loans for small-medium businesses: One of the challenges for small-medium businesses is the limitation in

granting loans. According to nancial regulators of Indonesia, banks and other nancial institutions can only grant

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22/5/2021 Industry Study: Fintech in Indonesia and How Kredivo Boosts Conversions by 40%

up to Rp600 trillion. In 2016 alone, the national loan demand had reached Rp1,600 trillion, due to which there was a
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restriction on availing bank loans. Fintech companies have simpli ed the process for the businesses by not asking

for collaterals and enabling the debtors to submit the documents from anywhere, anytime.

Convenience: While cash is still the preferred mode of payment, cashless transactions and e-money products

provide convenience to the users as they can transact easily without having to carry cash anywhere. The shift from

cash to cashless has resulted in the growth of Fintech companies.

Challenges of Indonesia’s Fintech Industry

While the Fintech industry is working to push the Government’s vision of nancial inclusion and o ering

convenience to users, it has its own set of challenges.

Low internet connectivity: Despite the high penetration of the internet, connectivity is still low in Indonesia.

Considering that the internet is the key requisite for delivering services to customers, Fintechs face a challenge in

reaching out to its customers, while customers face problem in completing their transactions without any hassles.

Preference for cash transactions: While Indonesia is shifting to cashless mode of payment, cash is still the preferred

mode of payment for merchants. This poses a challenge for Fintech companies.

Strict regulation: This is one of the major challenges for Fintech companies. There are only 40 P2P lending services

registered with OJK due to the strict regulatory process laid down by OJK and Bank Indonesia. At one point of

time, OJK published a list of 100 lenders who were not recognized by OJK, while Bank Indonesia announced the

release of Fintech Regulation and Regulatory Sandbox in 2017 to protect the interest of the customers. According to

a study by the Monash Business School on Indonesia’s Fintech industry, the regulator’s decisions are well-

intentioned as they want to encourage people to adopt the nancial system and discourage fraudulent activities.

However, the lack of clarity in the process is posing a challenge to Fintech companies that have not received a

green signal to operate from OJK.

Lack of stickiness: According to Hootsuite, each consumer uses at least two or more Fintech services. With so

many Fintech apps vying for the customer’s attention, increasing stickiness and engaging the users on the app can

be quite a challenge for Fintech companies.

How Kredivo Increased its Stickiness and Increased

Conversions by 40%

Kredivo is an Indonesia-based Fintech company that allows e-commerce buyers to apply and qualify for instant

credit and payback over time. Within three years of launch, Kredivo had become one of the fastest growing and the

stickiest digital payment channels for e-commerce in Indonesia. Kredivo wanted to go a step further to engage new
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users who had downloaded the app, enable them to complete the transactions within the app, and boost the overall

brand and app store SEO. It wanted a single marketing automation platform that could help them address

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engagement challenges and also handle newer channels and use cases in the future. Kredivo chose MoEngage’s

Push Ampli cation to track the noti cations that were sent. It also acted as a fall back to GCM and delivered

noti cations to devices with a failed delivery, which boosted the delivery rate by 20%.

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Kredivo also used MoEngage’s Automated Work ow to set up unique work ows based on user attributes such as
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age, gender, and income to send customized o ers via emails and push noti cations. The automated work ow led

to a 40% increase in conversions within ten months.

Kredivo’s Work ow

In order to improve the SEO in the app store, Kredivo sent automated emails to the users who had completed an in-

app transaction to leave their ratings and feedback. The triggered emails led to a 64% conversion rate.

All these e orts together helped Kredivo to improve the engagement on their app.

You can read the complete case study here.

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For a Fintech company, personalized customer experiences and winning the trust of customers is crucial to sustain

and stay ahead in this new and competitive industry. With marketing automation platforms like MoEngage, you can

achieve this goal quickly.

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ABOUT THE AUTHOR

Akshatha Kamath

Akshatha Kamath leads content marketing at MoEngage. She's one of "LinkedIn Content 50", has been recently featured on the

list of "The Most In uential Content Marketing Professional" by World Marketing Congress and is among the “100 Fastest

Growing Marketers” identi ed by Adobe. She is a content marketing specialist with close to 12 years of experience in writing,

strategizing, and managing content for various organizations. Before MoEngage, she’s steered content marketing teams for

companies like Simplilearn, Vizury, and Conzerv helping them with content, brand, and communication strategies that are aligned

with their business goals. Akshatha volunteers with AMA SF as a writer. She is also a published author with publications such as

Clickz, Digital Market Asia, Get Elastic, and e27. She is an avid reader and a traveler who enjoys experiencing the avors of life in

di erent places.

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