Kholifatul Ummah – Fintech Indonesia: Financial Service Disruption | BukaTalks

Hello everyone, welcome to Bukalapak.

Assalamualaikum warahmatullahi wabarakatuh I’m Ifa, Kholifatul Ummah.

All the people are talking about fintech right now in Indonesia, what is fintech actually? Many people still think we need to absorb more financial services, if I summarize, fintech is a technology that changes financial services to be accessed more easily by the general public.

So that’s why my theme is; Financial Service Disruption, I’m the Fintech Product Manager at Bukalapak, and tonight I will share with you about fintech, disruption, service, and what we are developing right now at Bukalapak.

If we look at the chart, Indonesia today is similar like China 10 years ago.

10 years ago, China is very much like us now in Indonesia who were still trying to absorb the cashless society, at that time Alipay and Tencent were not as big as now in China.

But today, if we see WeChat, its valuation is almost equivalent to Google and Facebook.

Alibaba and Alipay has a lot of users, apart from the payment sector, they are also already sustain in other fields, such as investment, wealth management, even insurance.

Actually this qibla that makes the fintech actors in Indonesia want to be able to provide the same service like China 10 years ago.

So this is Indonesia in a glance.

Basically OJK said that we have more than 300 million mobile phone users in Indonesia, and from the survey, 13 million per household in Indonesia owns mobile phones, which means mobile phones and internet service in Indonesia is moderately cheap because many people have access to it.

But on the other hand only 20% of the 250 million people who have bank account, so only 20% of 250 million people who have access to financial institutions.

Actually this is the issue that bring, I do not know why, for the last 2 years fintech is so booming in Indonesia, fintech really want to solve this case.

These are the many products of fintech; Payment, P2P Lending, Financing, Mutual Fund, Online comparison, Insurance, Crowdfunding, all of which aim to disruption society.

What is actually a disruption? Disruption is a change of course from traditional to more modern, but by forcing.

New technology that forced society to change, society changed because of a new technology, like now for example helix service transportation, it can enforcing to the payment service, it's one of the big disruption.

Why does disruption occur? Because technology and service provide access to a more relief and cheap for the public to acquire financial services.

We can acquire an easier loan, with lower interest, with easier terms, we can invest easier also, and we also have guidance to choose financial products, because there also many fintech with online corporation system.

So what is Bukaklapak do? Basically dealing payment, we can top up balance, buying data package, pay electricity, but one very interesting thing that we can share here is that we can pay zakat (alms) also, which is beyond my mind.

We can easily pay our zakat online, and the payment methods are also numerous, we can pay it through Indomaret, people who do not have bank account can pay through Indomaret, Alfamart, or even Post Office.

This is one of the billing payment disruptions.

And the second thing, last February, Bukalapak launched BukaReksa, which is one of the mutual fund platforms in Indonesia, and then BukaMobil, leasing, if you want to purchase new car you can filed through BukaMobil at Bukalapak.

The newest is BukaEmas, which we try to sort new technology to new service, so we want to provide an access for everyone to invest easily.

We can pay car installment through Indomaret, we can invest in Mutual Fund, buy gold, all through Indomaret, or Post Office even, we don’t need to go through all the fuzz of filling out countless forms to the bank to be validated, simply register to the platform, this is one of the disruption.

Essentially fintech ecosystem in general is similar, there are still users, payment channels, there are banks, banks are one of the institutions that really support fintech.

But how do people with no bank account can access the bank? We use payment channels.

This payment channel is one of the key player at fintech, because it bridges people who do not have bank account nor credit card to be able to do transactions and a lot of other things through fintech.

And Partners, I think all fintech companies in Indonesia have partners that provide services for them, and they all connected by API.

Now everything is API-based, which is service and communication service.

So what are the challenges? I try to summarize it; How to cook avocado toast taste like "sambal terasi"? Because this is a new thing for Indonesia.

Fintech is something fancy, we all the fintech product actors want to convey that fintech is easy to use, but people, especially those outside Jabodetabek haven’t truly understand what financial service itself? This is the biggest challenge, how can we design a product that easy to use? And the second thing is Regulation.

Why is regulation a challenge? Because regulation require many things, such as we have to KYC using real ID, the data center must be validated, there must be audit, we must comply the regulations of Bank Indonesia, OJK, etc.

This is what actually distinguishes fintech from other products, different from market place, very, very different because fintech require a good journey and must comply with regulations.

But actually the goal is to simplify and provide customer satisfaction, because fintech have low-cost infrastructure, if we compare with banks it’s so far, banks have very good infrastructure, they already have certification A, B, C to Z, but not fintech.

Fintech is new and easy to use, that’s why we must comply regulation, that’s why Bank Indonesia really pushes the fintech actors to comply with their regulation.

How to provide a better journey for fintech? The first thing is we have to define the product goal; in the product goal there are brand goal and user goal.

Brand goal and user goal are very different.

Brand goal is how we can deliver the product message, whereas the user goal is how the user can use the fintech product easily, like I said earlier; we make avocado toast with the taste of sambal terasi.

Because the majority of user consumes sambal terasi but we want to provide a brand new product that we adopted from abroad.

The second is competitive research, we see a lot of good fintech products like Alipay, Tencent, WeChat, even LinePay maybe, many fintech products are already mature, here we use competitive research, we compare their actual user journey, what can we absorb? The third one is design sprint, because we work in a team, there’s engineer, data, product manager, every time we want to develop a product we have to discuss one by one, and one more thing that distinguish, fintech have many stakeholders.

Now in this design sprint we will validate, we inquired what kind of technology, then we design the product.

The fourth is create wireframe, because we've asked to several stakeholders and engineers, we can create wireframe, the depiction of what kind of fintech product that we want to construct.

After wireframe, maybe UI designer will initiate design product part 1, so we can already see what the product design looks like.

But we still have to re-validate, so UX will do research journey, which there are three ways to do it; there is concept testing, what exactly is the goal of this product? What is the message of this product? The second one; usability testing, usability testing is more towards to whether the user understands how to use this product? If the usability testing is still not getting a satisfactory result, we can use LGD interview.

The seventh is validation from Data Scientist, we don’t actually have to do the number seven, it depends on each of the products, but insight from the Data Scientist is very useful, why? Because the data scientist will provide from the data, such as user segmentation, demographics, etc.

The last one, when all is OK, comply, then we go into product design iteration part 2, this is really when the design is established, the flow is already OK, subsequently we are ready to go to engineering.

Overall to develop fintech is not much different from startup or other product development in starting the development cycle, only in fintech we’ve got stakeholders.

Fintech is closely related to stakeholders, it could be bank, marketing, business development, because fintech is unquestionably very related to external parties.

We cannot do in-house development, it might be that differentiate product development with fintech product development.

The first one: Ideation, there will be Product Manager, UI Researcher, and UI Designer to build the ideation as I explained before, stages where we can provide better journey.

After ideation is already OK, UX will do user journey research, which I had mentioned before also, there is competitive, there is usability, there is concept, and there is interview.

From the results of research, it generated product design, the product design is the result that is already complete and ready to get into the engineering stage.

Only then will the product will be develop in engineering, how it will connected to each other, how the feature is developed, and how the quality of the product so as it will be free from bugs.

Once the product is OK and being launched, Product Manager and Data Scientist must monitor the growth of the product from funnel to funnel, from acquisition, activation, traction, transaction, up to referral.

From there we can find a lot of insight that we can use for improvement.

Of all the fintech products I cited earlier, from loan, financing, billing payment, how to provide the product to obtain a good journey is actually the goal, we will have digital economic feature.

We already have so many remarkable SMI in Indonesia, a lot of SMI online platforms for growth including Bukalapak that have marketplace, there are also so many technology disruptions and investment platforms.

Essentially the goal is to convert traditional transaction to online transaction, we want Indonesia to be a cashless society.

Cashless society is the future of digital economy, which will provide a financial revolution.

The vision is for Indonesia in the next 10-20 years ahead with the existing technology products, we will have a cheap access to finances, unbankable people, people in the villages can do shopping in the grocery store using cards.

Fundamentally that is the main purpose why this fintech became one of the disruptions, because these fintech products are expected to provide access to cheaper financial services.

That’s all that I can share tonight, thank you.

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