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Fintech companies target millennials for gold investment
Newly established app-based gold trading company Treasury has teamed up with online financial planner Finansialku
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span>Newly established app-based gold trading company Treasury has teamed up with online financial planner Finansialku.com to promote investments in gold among millennials to help them prepare for emergency situations.
Treasury brand development head Narantara Sitepu said both companies would jointly hold a roadshow in several cities in Java and Sulawesi in the second quarter of this year in an effort to explain the importance of “emergency funds” among millennials.
He added that some people have ignored the need to save money in preparation for emergency situations because they tended to adopt consumptive behavior due to a lack of financial literacy.
“Treasury will facilitate easy access to gold as an instrument of investment and Financialku.com will provide access to financial knowledge,” Narantara said.
Financialku.com founder and CEO Melvin Mumpuni said his company would integrate Treasury’s services into its application by the third quarter of this year to provide its users with investment options.
Melvin added that gold was a good investment option as it would hedge inflation. Unlike other instruments, such as time deposits, which would require some time before the depositors could withdraw their money, collectors could easily convert their gold to cash at pawnshops during emergency situations.
“With digital-based gold trading, it will be easier for people to invest in gold,” he said. “I may not recommend gold for a long-term investment, but it is a recommended instrument for obtaining emergency funds.”
Melvin added convenient digital transactions have pushed some people to be consumptive and to ignore their needs to save emergency funds, which they would need in unexpected situations such as layoffs or accidents.
His statement was in line with a 2017 report by the Indonesian Internet Service Providers Association (APJII), which found that 64 percent of Indonesia’s online shoppers were millennials.
Melvin claimed that many millennials aged between 20 and 40 would only allocate 11 percent of their earnings for savings and 2 percent for investments.
As part of the productive group, he suggested that millennials set aside emergency funds equal to at least six-fold of their monthly spending.
“When it comes to saving in the form of emergency funds, we should look for investment products that are safe, liquid and accessible,” he said, citing gold as an example.
Narantara said throughout generations, Indonesians have the tendency to collect gold for savings and sell it during emergency situations.
“We are offering a more effective way to stick to this by using an online application,” he said.
Treasury, established in November last year, had garnered 2,000 application users, said Narantara. He added that his company was upbeat that it could book 100,000 new users this year.
Apart from Treasury, many other e-commerce platforms also offer similar gold trading services, such as app-based EmasDigi, IndoGold and big unicorns Bukalapak and Tokopedia.
The platforms allow their users to purchase gold with a small budget and also offer installment schemes.
Treasury, for example, allows its users to buy and save gold online for as little as Rp 20,000 (US$1.40) and print gold bullion with a minimum weight of 0.5 gram.
Online-based gold trading services have sparked interests among millennials, including 23-year-old university student Asyam Mulayyan Dary who has been investing in mutual funds. He said such services offered convenience in investing.
“However, I’m still wary of such platforms. I’m afraid I won’t be able to do anything should there be any problems, such as fraud,” he told The Jakarta Post.
Narantara said his company was complying with rules set by the Financial Services Authority (OJK) and the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti) to ensure consumers’ rights are protected.
He added that his company was currently in the process of acquiring a fintech license from the OJK.
However, the OJK’s education and consumer protection commissioner, Tirta Segara, previously confirmed that online-based gold investments were under the supervision of Bappebti.
“This [online gold investment] is something new, so I understand that people are still confused [regarding the regulations],” he said.
Bappebti chairperson Indrasari Wisnu Wardhana said online-based gold trading fell under the supervision of the Trade Ministry’s Bappebti as stipulated in Bappebti Regulation No. 4/2019. (ars)
