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Embedded Finance: An alternative way to reach the Underbanked and Unbanked
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any Indonesians in big cities like Jakarta are becoming increasingly tech-driven. For them, using mobile apps to order transport, have food delivered to their doorsteps, and pay for purchases at the corner store are all part of a typical day.
However, these behaviors do not yet extend beyond the major metropolitan areas - they do not fully represent the 270 million people living across the archipelago. Just as high logistical costs increases the cost of goods distribution to the rural areas, it similarly impedes the provision of services, including financial services. This has led to underserved segments who only have limited access to basic financial services. As a result, nearly 100 million Indonesians are still unbanked, with many more underbanked.
This is where embedded finance comes in - by offering an opportunity for more people to gain access to formal financial services. Embedded finance refers to the integration of financial services into customers’ everyday use cases. It is “finance entering the lives of users”, versus the more conventional approach of users going to financial service providers.
For industry players looking to get into embedded finance, there are three main things to consider. First and foremost is the use case - it must be highly context-specific to the user, and be a seamless experience. Second, having a close collaboration with regulators is essential to ensure compliance. Last but not least, investing in high-quality talents is critical, as success is dependent on a synergistic set of technological and financial service skills.
At GoTo Group, it has become our mission to address this directly by enabling Indonesians to access fintech and banking services easily and seamlessly. As an example, GoPay Tabungan by Jago is the result of our collaboration with Bank Jago, and it offers users easy access to various types of bank accounts that cater to different financial goals, aligned with the vision of the Indonesia Payment System Blueprint (BSPI) 2025. The collaboration further opens greater access to loans and consumer financing products, both by GoTo and our partners. By embedding GoPay Tabungan by Jago in our transaction flows, it can open access to savings, credit, and insurance. In the long term, this can lead to greater inclusivity and foster more widespread financial empowerment.
The World Bank has highlighted that financial services will play a crucial role in alleviating poverty around the world. While it does not come without its challenges, embedded finance provides an alternative approach towards a more inclusive financial landscape, and greater prosperity for more Indonesians.
Hans Patuwo’s Profile
Hans Patuwo serves as Director and Chief Operating Officer of GoTo, overseeing Group functions, strategy development and transformation.
Prior to taking on the role of Chief Operating Officer in 2024, Hans was President of GoTo’s Financial Technology business unit from 2023 to 2024 and Head of Payments & Financial Services from 2021 to 2022. In that role, Hans was responsible for leading the Company’s payments and financial services business, with a focus on making financial products and services accessible to everyone across Indonesia.
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