Today’s lack of interest by local investors in Indonesia’s capital market provides a benchmark for people’s investment priorities.

The capital market’s main obstacle not only lies in the lack of understanding of people in regard to investments or a need to conserve money, but is also heavily affected by people’s consumerspending lifestyle.

We can analyze the culture of saving. The banking sector had amassed Rp 4.84 quadrillion (US$365.14 billion) in third-party funds by the end of December 2016, according to banking statistics from the Financial Services Authority (OJK).

However, this sum is no more than 35 percent of Indonesia’s gross domestic product (GDP).

(Read also: Fintech Talk: Fintech: Moving beyond financial literacy)

This situation is the exact opposite of that in Singapore. In Singapore, money deposited in the banking sector is not massive, approximately 46 percent of GDP, according to data from the World Bank.

However, in stark comparison, the amount of money invested in mutual funds in Singapore’s capital market is approximately 591 percent of GDP.

This is believed to be one of the largest drivers of Singapore’s high income per capita at around $87,100, as people’s incomes stream not exclusively from their payrolls, but also from investment yields.

Back in Indonesia, the continuous decline in bank interest rates that has occurred amid a rise in living costs, low literacy levels with regard to alternative investment instruments, along with a lack of accessibility to capital markets, has resulted in a poor interest among people to invest.

This is a breeding ground for increased interest in tangible investments, such as in property.

In the meantime, if people were to invest in the various products offered in the capital markets, they would have the chance to reap higher competitive returns and to obtain assistance that ensured ease of redemption.

The last component is a safety guarantee as capital market supervision and surveillance are conducted by the OJK.

Money market mutual funds, which have the lowest risk rating compared to other capital market products, can already offer net revenue of between 6 percent and 7 percent per year, excluding tax.

The minimum investment amount can be as low as Rp 100,000, which means that anyone can enjoy the offered benefits.

The need for enhanced accessibility to capital market products is critical in increasing people’s willingness to invest.

As of March, there were 85 investment managers and 129 securities companies holding an OJK license, as shown by OJK’s capital market statistics.

However, a majority of them are based in Jakarta and do not operate in remote locations elsewhere.

This is a fundamental obstacle that causes low transmission intensity to the general public regarding capital market information.

Meanwhile, the efforts to develop the capital market, especially through mutual fund products, are increasing, in line with technological advancements that have further pushed penetration of the internet.

The marketing of such mutual fund products can occur online, through Bareksa.com, Mandiri Sekuritas, Indo Premier Sekuritas or Phillips Securities Indonesia.

Despite the potential, online mutual fund transactions have issues too. One issue is bank transfer fees, which are relatively high.

People interested in investing must transfer funds from their account to the product’s account. The fee is high if the transfer comes from a different bank.

Even if the online sales agent does not impose a transaction fee, bank customers are still charged around Rp 6,500 for an interbank transfer, a relatively high amount compared to the minimum investment value of Rp 100,000.

among technology companies can answer the above challenge.

For example, Bareksa.com and DOKU collaboration enables the latter’s mobile payment technology to complement transaction processes and eliminate unnecessary transaction fees.

It also provides an opportunity to reach people who do not own a bank account, a focus for financial inclusion efforts within the capital market industry.

The success of such a synergy between a payment gateway and a marketplace is evident in China as well.

The collaboration between Alipay and Yue Bao has helped optimize a portfolio that was valued at approximately $120 billion as of the fourth quarter of 2016, around 14 percent of Indonesia’s GDP.

Even more, Alipay and Yue Bao only needed nine months to catch up with the growth rate of financial institutions, which have existed for more than a decade.

With the rise of fintech and its popularity in the capital market sector, especially mutual funds, there is hope that more and more Indonesians will start to invest.

The ones who invest currently only represent 0.13 percent of the population.

An increase in domestic investors will reduce the capital market’s dependence on foreign capital and will ultimately bolster Indonesia’s economic resilience.