TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Partnering with fintech start-ups a win-win solution: UOB
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
United Overseas Bank’s (UOB) group channels and digitalization head Janet Young gives an interview on the sidelines of the Indonesia Fintech Festival and Conference at the Indonesia Convention Exhibition (ICE) venue in Serpong, Tangerang, on Aug 30, 2016. (JP/Anton Hermansyah)
The rise of financial technology (fintech) start-ups, which provide loans for the people, has put them face-to-face with banks.
However, instead of assuming that start-ups will steal banks’ market share, building partnerships with them will provide the ultimate benefits for the lenders, a banker has argued.
Fintech start-up applications could efficiently fill gaps in financial services that banks were unable to work on, such as unbankable small and medium enterprises (SMEs), said United Overseas Bank’s (UOB) group channels and digitalization head, Janet Young.
The SMEs market in Indonesia remains wide open as Bank Indonesia data as of August showed that 78 percent of SMEs in Indonesia were unbankable. The sector is known for providing better margins in the banking industry as the interest rate for SME loans is the highest compared to other loans.
“Sometimes the banks are too busy with consumers. In the banks, we are trying to provide solutions for all financial services. Fintech may find an angle that specific customers want, and then focus on it,” Young told The Jakarta Post during the Indonesia Fintech Festival and Conference at the Indonesia Convention Exhibition (ICE) in Serpong, Tangerang, on Tuesday.
Banks, she added, could select potential start-ups for investment by holding hackathon events, training them, exploring ideas and arranging meetings with the bank’s clients as potential investors.
Go-Jek CEO Nadiem Makarim, who recently launched the e-money channel Go-Pay, said start-ups could reach spots that banks failed to reach, such as going to villages and reaching rural SMEs. “As a start-up you need one of three things in order to propose partnerships with financial institutions. Bring your customers, provide technology, and provide added value,” he said. (ags)
