BUSINESS

Get to know Fintech or Financial Technology Companies

Financial Technology, also known as Fintech, is a combination of technology and financial services that can transform conventional business models into moderate ones.

This technology can make remote transactions with fast payments in seconds, so there is no need to meet face-to-face or bother carrying cash to pay for it.

This fintech company is classified as an innovation in the field of financial or financial services, where this innovation focuses on finance supported by modern technology. Maybe like a startup model that benefits a lot from developing technology.

Fintech (Financial Technology)

A fintech company is a type of financial services company that collaborates with technology.

Many startup companies use this technology to maximize, change, and accelerate aspects of financial services.

On the platform of fintech companies, services are available in the form of payment methods, fund transfers, loans, fundraising to asset management that are carried out briefly and quickly thanks to the help of this technology.

So don’t be surprised if this fintech can change a person’s lifestyle, especially for those who are familiar and involved in finance.

Thanks to the sophistication of financial technology, the economic and financial sectors have also increased their development.

In ancient times people had to meet face-to-face to transact and this would of course take time and energy.

However, with the existence of fintech, all transactions can be done through gadgets such as online transactions, checking deposit interest, online transfers via mobile banking applications, and so on.

Now, fintech is quite popular among the public, especially among the media and people who are active in the technology world.

Benefits of Fintech

There are several reasons that make the existence of financial technology able to affect a person’s lifestyle. The following are the benefits of financial technology for society.

  1. Developing Startup Companies

Currently, there are lots of new startup companies that are starting businesses and creating product innovations, one of which is in the fintech field.

An example of a startup business that uses fintech is Moneythor. This fintech company has created a new product that will increase experience in the digital banking field with more detailed and specific analysis results.

This type of company usually starts to grow in developed countries such as Singapore which then expands its targets to all of Asia.

  1. Improving the Standard of Living

Fintech is able to provide large profits and income for startup companies. In addition, fintech provides an increase in people’s living standards and purchasing power.

For example, fintech companies that have innovations in presenting merchant products, where these merchants can accept payment systems using debit or credit cards with relatively low fees.

Another example is fintech companies improving banking infrastructure so that it will have an impact on increasing the purchasing power of consumers and the public.

Fintech also plays an important role in efforts to reduce the poverty rate which has reached 600 million people. Therefore, startup companies need to convince investors about this problem.

  1. Easy Financial Services

The most benefit you can feel from the existence of financial technology is the convenience in financial services.

If you compare it with ten years ago, people who want to transfer money have to go to a bank teller or ATM machine which of course takes time.

This is somewhat inconvenient because it takes quite a long time, not to mention the queues that are increasingly time-consuming and quite tiring.

Unlike the current situation, the money transaction process can take place easily thanks to the help of fintech technology.

Some fintech even provides features to pay monthly bills such as telephone, electricity, and BPJS.

By using fintech, people will save more energy and time without having to leave the house to make various transactions

  1. Reduction of High-Interest Loan Amount

Fintech seems to have answered the public’s request for a transparent money lending system. Fintech can provide loans with relatively low interest if you compare it to other loan systems.

The amount of investment in fintech is increasing rapidly in the world, including in Indonesia itself.

Based on these opportunities, this type of fintech company also gets investment funds easily from investors because the level of profit is also likely to be high.

  1. Financial Inclusion Supporter

The presence of fintech can certainly be an alternative solution to achieve the financial inclusion target which has so far reached 49%.

The services from fintech itself are basically online based so that users can easily access them at any time as long as they are connected to an adequate internet network.

  1. Helping MSMEs for Business Capital

Before the emergence of financial technology, MSMEs in Indonesia used to rely on loans from banks for their business capital.

In general, bank loans usually have quite high-interest rates and the procedures and requirements are quite difficult.

MSME actors must pay attention to the requirements when applying for a loan at a crowdfunding institution, such as the amount of loan interest.

You also need to pay attention that the institution you choose has been registered and has been supervised by the OJK (Financial Services Authority). The role of fintech can provide solutions to obtain business capital.

This loan system is commonly known as peer to peer (P2P) lending. P2P lending is an online-based lending and borrowing platform that will bring together MSME actors with investors or people who are willing to invest to lend money for business capital.

Benefits of Fintech

There are several reasons that make the existence of financial technology able to affect a person’s lifestyle. The following are the benefits of financial technology for society.

  1. Developing Startup Companies

Currently, there are lots of new startup companies that are starting businesses and creating product innovations, one of which is in the fintech field.

An example of a startup business that uses fintech is Moneythor. This fintech company has created a new product that will increase experience in the digital banking field with more detailed and specific analysis results.

This type of company usually starts to grow in developed countries such as Singapore which then expands its targets to all of Asia.

  1. Improving the Standard of Living

Fintech is able to provide large profits and income for startup companies. In addition, fintech provides an increase in people’s living standards and purchasing power.

For example, fintech companies that have innovations in presenting merchant products, where these merchants can accept payment systems using debit or credit cards with relatively low fees.

Another example is fintech companies improving banking infrastructure so that it will have an impact on increasing the purchasing power of consumers and the public.

Fintech also plays an important role in efforts to reduce the poverty rate which has reached 600 million people. Therefore, startup companies need to convince investors about this problem.

  1. Easy Financial Services

The most benefit you can feel from the existence of financial technology is the convenience in financial services.

If you compare it with ten years ago, people who want to transfer money have to go to a bank teller or ATM machine which of course takes time.

This is somewhat inconvenient because it takes quite a long time, not to mention the queues that are increasingly time-consuming and quite tiring.

Unlike the current situation, the money transaction process can take place easily thanks to the help of fintech technology.

Some fintech even provides features to pay monthly bills such as telephone, electricity, and BPJS.

By using fintech, people will save more energy and time without having to leave the house to make various transactions

  1. Reduction of High-Interest Loan Amount

Fintech seems to have answered the public’s request for a transparent money lending system. Fintech can provide loans with relatively low interest if you compare it to other loan systems.

The amount of investment in fintech is increasing rapidly in the world, including in Indonesia itself.

Based on these opportunities, this type of fintech company also gets investment funds easily from investors because the level of profit is also likely to be high.

  1. Financial Inclusion Supporter

The presence of fintech can certainly be an alternative solution to achieve the financial inclusion target which has so far reached 49%.

The services from fintech itself are basically online based so that users can easily access them at any time as long as they are connected to an adequate internet network.

  1. Helping MSMEs for Business Capital

Before the emergence of financial technology, MSMEs in Indonesia used to rely on loans from banks for their business capital.

In general, bank loans usually have quite high-interest rates and the procedures and requirements are quite difficult.

MSME actors must pay attention to the requirements when applying for a loan at a crowdfunding institution, such as the amount of loan interest.

You also need to pay attention that the institution you choose has been registered and has been supervised by the OJK (Financial Services Authority). The role of fintech can provide solutions to obtain business capital.

This loan system is commonly known as peer-to-peer (P2P) lending. P2P lending is an online-based lending and borrowing platform that will bring together MSME actors with investors or people who are willing to invest to lend money for business capital.

Types of Fintech

After you know the meaning of fintech and its benefits, let’s find out what types of fintech are developing in Indonesia.

1. P2P Lending

As stated in the previous article, P2P Lending (Peer to Peer Lending) is a platform that provides online lending and borrowing services. The many financial needs, from urgent funds to capital, make this platform much sought after.

The growth of P2P lending companies in Indonesia has increased every year. However, according to data from the OJK, as of February 2021, there are only 148 legal P2P Lending companies. Until now OJK has closed tens to hundreds of illegal P2P Lending companies. So if you are interested in using this fintech, stay alert.

Not only as a lending and borrowing service, but the P2P lending fintech platform can also be used as an investment platform. Therefore, you can fund people who want to borrow funds from this platform.

2. Payment Gateway

The growth of e-commerce platforms in Indonesia has triggered more and more fintech payment gateway companies. This fintech company serves as a bridge between customers and fintech eCommerce companies.

With a payment gateway, you no longer need to bother going to an ATM or depositing through a bank teller. Only by filling in the nominal money, the payment transaction process via virtual can be done directly.

This fintech has also been based on a legal umbrella from Bank Indonesia, so all transactions carried out are of course safe. In terms of technology, the payment gateway is equipped with 3 tracking systems to protect against data theft.

These tracking systems include the Address Verification System (AVS), Card Security Code (CV2), and 3D Secure Password. All of these systems are used to minimize the level of fraud committed by hackers.

3. Crowdfunding

Fintech Crowdfunding is almost the same as P2P lending. However, crowdfunding positions investors as business owners, while in P2P lending, investors only finance. Crowdfunding is a startup that provides crowdfunding services for an online business or activity.

Crowdfunding platform brings together people who need venture capital with capital owners. Later the business or business that is owned will be registered with a Crowdfunding platform so that investors can invest their funds in the business you have.

4. Insurtech

The Insutech platform is an abbreviation of Insurance Technology or Insurance Technology. The development of insurance in Indonesia is growing rapidly. One clear evidence of the development of insurance is the number of e-commerce platforms that trade insurance products.

The existence of this fintech makes it easy for the public to access insurance services. Starting from product distribution, and evaluating customer data, to purchasing policies that only use gadgets. This technology supports public education on the importance of protecting themselves financially.

5. Asset Management

One activity that is still difficult to do is managing finances. With the development of technology, fintech presents applications that can manage your finances. This app makes it easy to keep track of where your money is going.

For those of you who find it difficult to manage personal money, it never hurts to use this application. Not only for individuals, but managing money on a large business scale can also be with an asset management application.

6. Remittance

Remittance fintech provides money transfer services between countries. Remittance aims to help people who do not have a domestic or foreign bank account to make transfers.

There have been many remittance applications that have developed and are popular in the community. The existence of this fintech helps TKI, TKW, or anyone whose family is abroad to make money transfers easily and cheaply.

7. Investment

Investing today is not difficult anymore. Many investment applications provide online services. There are many products that you can choose to invest in. Starting from online mutual funds to Bitcoin investments.

So there is no longer any reason to delay your investment. Do it now so that you achieve financial independence at a young age.

Avoid Legal Fintech with the Following Feature Features

The presence of fintech companies does provide convenience for people who need fast funds. Even so, many illegal fintechs have sprung up and are increasingly troubling.

This makes the government ask the public to be more careful in choosing online loans so that they are not caught in illegal fintech debt because the interest offered is very large. The reason is, that there are so many people who have become victims of illegal fintech lending and have difficulty paying bills because the interest is getting stifling.

Therefore, the government asks the public to be more careful in choosing online loans so that they are not caught in illegal fintech debt because the interest offered is very large.

So that people don’t fall into illegal fintech, here are the characteristics of illegal and legal fintech that can be a benchmark for the community before applying for an online loan, as quoted from the official OJK website.

There are several characteristics of illegal fintech companies that the public should be wary of, such as:

  • Illegal fintech has no legality, which means it is not registered and does not have official permission from the OJK.
  • Provides very high interest, fines, and fees and tends to be unclear in billing.
  • The billing process is unethical and tends to be rude and threatening.
  • Illegal fintech will access consumer data such as contacts, cameras, microphones, and others.
  • Illegal fintech also has no complaints service.

The location of the fintech company is also unknown. Even if the borrower wants to come directly to the office, they will not tell the office address. Often use SMS spam mode in offering products. Of course, it is clear that legal fintech is prohibited from using private communication facilities without permission.

In addition, the public is also asked to be more aware of illegal fintech tricks that often use names or logos that resemble legal fintech.

Referring to the OJK website, recently the Financial Services Authority (OJK) again blocked 3,193 illegal online loans because they were caught using customer data to collect debts in an intimidating way.

To find out the list of legal fintech lending companies, the public can access them directly on the OJK official website. Here are the characteristics of a legal fintech company. That is:

  1. Licensed and Registered with OJK

The hallmark of a legal fintech company is that it has an official license and is registered with the OJK. That way, in carrying out its business, the fintech is required to follow the regulations regulations that have been determined by the OJK.

If a legal fintech is found to have been violated, then the OJK has the authority to revoke the license or block the company. Thus, people are also calmer when applying for loans.

  1. Clear Company Information

Getting permission from the OJK is certainly not an easy thing. OJK will also ensure that the company does exist or is not fake like an illegal fintech, one of which is already a legal entity.

As is known, to create a company that is already a legal entity, of course, you must attach a clear office address. OJK will check whether the office address listed is correct.

Therefore, make sure you look for complete information regarding fintech companies before applying for a loan, starting from the company address, assessments of people who have borrowed funds to whether the website or application is guaranteed safe.

This is because all fintech companies that are legally registered with the OJK have physical offices that can be easily tracked. Also, find out if the company has a customer service that you can contact so you can easily get help if there is a problem.

  1. Fees Charged According to OJK

As explained above, OJK legal companies are required to follow all OJK rules, one of which is related to interest issues. Fintech companies that are licensed and supervised by the OJK are only allowed to pay interest to borrowers, which is a maximum of 0.8 percent per day.

There are several advantages for you if you trust a fintech that is licensed by the OJK. Borrowing money from legal fintech is certainly cheaper with a more transparent process.

In addition, the security of your data is guaranteed by ISO. Legal fintech is also directly monitored by the OJK, as well as restructuring when needed. Socialization activities are also continuously pursued so that people are no longer entangled in unlicensed fintech.

There are recommendations for using the online tax application feature which also comes from the best accounting system from the Journal, which can help many businesses, including Fintech businesses. Using these applications, of course, helps the progress of this highly developed fintech company.

May be useful!

 

 

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