The fintech industry in Indonesia is still mired in a regulatory sandbox. (Antara Photo/Aprillio Akbar)

Market Segment Expansion Key for Fintech's Survival


DECEMBER 04, 2019

Jakarta. Market segment expansion is key for financial technology, or fintech, companies to survive in Indonesia, a practitioner in the sector said on Wednesday.

Dong Shou, the co-founder of, a company focusing on anti-fraud and credit scoring services, said in Jakarta that for a fintech company to succeed here, it must prepare long-term plans, and one way to do it is by diversifying its market segment.

"We are confident about the market in Indonesia, that's why we started our business and set out our long-term plans here. We suggest starting fintech companies do the same," Dong said. 

One way to ensure the plans are a success is by diversifying a fintech company's market segment and products, he said.

"Diversify your products, never focus on just one segment," Dong said.

"For example, a lot of fintech companies offer lending services with most of them delivering short-term loans, such as payday loans. I personally think a product like this on its own is not very sustainable unless accompanied by other products," Dong said.

Dong also has other suggestions for fintech companies so they can achieve success in the competitive market.

“First, wherever they come from, every fintech company should be operating legally. In Indonesia, that means being registered with the Financial Services Authority [OJK]," he said.

"Second, really trust and invest in local people, especially for foreign companies. Businesses come and go when they don't have a strong and solid anchor," Dong said.

Investing in local staff, rather than bringing in talents from abroad, is important for the long-term future of the companies to ensure their sustainability.

Dong praised several mentoring workshops for potential local talents organized by unicorn companies in Indonesia such as Gojek and Tokopedia.

"The ecosystem is getting more and more mature. This will definitely help us find good people," Dong said.

On the other hand, Dong has also mapped out obstacles that he and his team found while running their business here. First is the OJK's unclear regulations.

"We are still in a regulatory sandbox," Dong said. The initial step every fintech startup must pass with the OJK is a lengthy assessment of the business, the results of which will be used to decide whether or not to give it a recommendation to continue its operations legally in Indonesia.

"This is a new segment, so teething problems are only to be expected," Dong said.

Aside from the regulatory difficulty, the rapid development of the local fintech industry also has its downside, he said.

"We're working with lots of fintech companies already. The scene is rather crowded. Some of my clients come and go because their businesses are not stable and that will impact on ours too," Dong said.


The Singapore-based artificial intelligence technology company now has branches in Indonesia, India, Vietnam and the Philippines.

Having established its presence in Indonesia for the first time in 2016, it now has 350 clients in the country, including Bank Mega, Permata Bank, Home Credit, Tokopedia and Gojek. provides anti-fraud and credit scoring services for the financial industry in Indonesia. It also collaborates with government institutions like the Citizenship and Civil Records Agency (Dukcapil) in identification verification.

The company offers a solution for companies that do not have the capability to design their own scoring models. "It's easy to interpret our key performance indicator [KPI], and cost-wise, our services are affordable," Dong said.

The company's services, he continued, will eventually reduce non-performing loan [NPL] ratio in their customers' portfolios.