1Fintech Development in Indonesia’s Capital Market
Fithri Hadi
Feb 2023

Digital Innovation in Indonesia’s the Capital Market
1. Digital technology innovation by startups has brought many private benefits in business:volume, growth, new jobs, new services. Since 2015 many new Fintech in Lending,
Alternative Payment, Remitance, Digital money, Credit Scoring, ecommerce etc in which
use internet as main service channel across archipelago.

Market Participants
Investors

Incumbent
Stock exchange, clearing ,custodian
Securities firms
Fund Manager
Settlement BankRegistrar

2. The big population of internet users and large number of unserved small businesses/SMEs attracted startup penetration (data Dec 2022: internet users reached 200 million
people, 50 million SMEs).
3. Some startups have reached big scale in business (data Dec 2022: ecommerce tradereached 47 billion USD, fintech lending reached 27 billion USD, etc)
4. In 2018 the capital market Regulator made innovation by issuing•equity crowdfunding fintech startup licenses to serve SME capital raising•fund supermarket fintech startup licenses to serve digital savvy investor

Big CompaniesDigital SavvyInvestors

Fintech Startup
Equity CrowdFunding
Funds Supermarket

SME Companies

4. Additionally, in 2019, the Stock Exchange Group and securities firms (incumbent) madebreakthrough in response to Covid-19 lockdown by creating :• eKYC : online account opening• e-IPO systems.
5. As the result in capital market,• Rapid growth of investors in the last 4 years (4 times increase)• SMEs allowed to raise capital from market (70% growth in 2022)

2

10,311,152
7,489,337

Investors Growth3,880,753
2,484,354

37,88%92,99%56,21%

SMEs Capital Raising Growth2019

2020

2021

DEC-223Fintech ECF – Equity Crowdfunding

ECF Business Model
1. An SME is able to offer its shares through light prospectus on ECF internet
platform. Investor can buy/sell its share simply through smartphone. Moreflexible than traditional way of capital raising.

Investors

SMEsFundLight

2. Capital size in each offering Max IDR 10 bln per SME, less than 500 holders

prospectus

ECF platform

3. ECF acts as underwriter, shares administrator, interface to central custodian
and custodian bank, providing surveillance and reporting system
4. ECF provides primary market and secondary market for share trading.

Central Custodian

5. ECF operates online, serves investor without physical interaction fromaccount opening, transaction, settlement. Client acquisition is done throughonline KYC without a face-to-face meeting by using national Digital-Id.

Custodian Bank

6. The regulator issues permits, regulations, supervision, regular audit
8. Market Performance (Dec 2022) :• Number of investors in platforms: 669,685 parties• Total funds raised: IDR 1,593 Billion• SME business sectors: food and beverages, store, property, etc

Payment gateway

ECF Performance

Buy/Sell
SME shares

Dividend Repayment

4

Fintech Fund Supermarket
1. Platform which offers wide array ofmutual funds from different fundfamilies through single investing
platform. One-stop service for investor
2. Investors gain benefits from number ofcomparable funds.
3. Investors also receive consolidated
funds reporting statements

Bonds

CashFunds

Stock

ManagedPortfolio

ETFs

4. Total AUM: IDR 10 Tln (as of Dec, 2022)
5. Turnover: IDR 18 Tln (NetSubscription and Redemption)ofMoneymarket

5Incumbent Go Digital

1. Stock Exchange Group/SE and securities firms
targeting millions of internet users by launching 2
initiatives: digital client onboarding system and online
IPO system
2. Digital onboarding system cut many processes incustomer acquisition into few steps helped bytechnology. It takes 14 days to open an account by
the traditional way. Online it can take just a few hours

E-IPO System

Digital on
Boarding systemtargeting internetusers

3. By online it uses e-KYC by biometric technology,
national Digital ID, and digital signature
4. E-IPO utilizes online meeting tools, paperlessdocument, digital signature to make it lean and fast

Big Companies

Prospect Investors
from Internet UserThank you!