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Sri Mulyani calls for 'level playing field' through fintech policy approach
Sri Mulyani says that a policy approach ensuring fair competition, consumer protection and economic growth is needed in Indonesia's burgeoning fintech industry.
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(Illustration of fintech) Finance Minister Sri Mulyani Indrawati has called for a policy approach that ensures fair competition in the financial technology (fintech) industry to protect consumers and support economic growth. (JP/Hengky Wijaya)
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inance Minister Sri Mulyani Indrawati has called for fair competition in the financial technology (fintech) industry to support economic growth while raising concerns over potential domination by bigger companies.
The minister pointed to the absence of a “level playing field” in the fintech industry and said that as fintech startups grew, they were usually acquired by even bigger companies.
“There will never be a level playing field because the bigger the company, the bigger their capital and liquidity to dominate the market. […] It is going to be difficult for new entrants to establish their presence,” she told a forum held by Bloomberg on Wednesday.
“Fair competition is going to be really critical in this [sector].”
The government has been monitoring developments over whether or not it should apply the same regulations for banks to fintech companies, said Sri Mulyati, noting that the government had taken measures to ensure a level playing field between fintechs and the rest of the finance industry.
The Financial Services Authority (OJK) and Bank Indonesia (BI) have respectively issued regulations on peer-to-peer lending and payment fintechs as umbrella rules for the practices while encouraging innovation and development toward financial inclusion and efficiency for the country.
According to the e-Conomy SEA 2020 report by Google, investment company Temasek Holdings and business consultancy Bain & Company, Indonesia’s gross merchandise value (GMV) is projected to grow 11 percent year-on-year (yoy) to US$44 billion this year. The figure is forecast to reach $124 billion by 2025 to make up a large portion of Southeast Asia’s projected $310 billion GMV that year.
