All fintech firms looking to do business in Indonesia were advised to halt their registration. The country's Financial Services Authority has suspended the registration process to give ample time to properly supervise existing firms already operating in Indonesia and to further higher industry quality.
According to DealStreetAsia, a regulator from Indonesia's Financial Services Authority (OJK) announced the suspension of the registration process for all aspiring fintech firms to operate in the country.
The report claimed that the industry has been rapidly growing and that the OJK is having trouble monitoring the entry of new companies into the country.
According to the OJK commissioner for the non-bank financial industry Riswinandi, the suspension is only temporary and that the country has no the intention of barring business opportunities in Indonesia for foreign firms.
However, it was highlighted that the OJK wants to ensure that the services offered in the industry to be of top quality and that the suspension is necessary to achieve this objective.
It was also announced that the applications under suspension are those involving the licensing process, the financial infrastructure, supervision, and the sanctions that would be imposed upon fintech firms.
In 2019, the OJK mandated the shut down of almost 1,500 illegal fintech firms operating in Indonesia. In January 2020, on the other hand, the government agency had to shut down another 150 illegal fintech firms as well.
The OJK further claimed that it would review other potential risks associated with the fintech industry including the financing and lending options such as those that generate unproductive loans.
In a press release published on OpenPR, it was revealed that a recent market study showed that the global fintech market has great growth potential. Among the product types that show positive futures were API, AI, Blockchain, distributed computing, and cryptography.
Companies involved in the industry were said to be focusing on innovative products in new technologies. The said focus was for the purpose of promoting production efficiency and the rearrangement of the product lifecycles.
Analysts of the report also looked into the long-term growth potential of the fintech sector and found that the development thereto is an ongoing process for players that observe the NAICS standard.
The said standard was explained to promote financial flexibility in the market and to enable the investors to choose optimal strategies for partaking in industries such as Indonesia.
Some of the companies that showed great potential were China's Ant Financial, Adyen, Qudian, Xero, Sofi, and Lufax. Other entities such as Avant, ZhongAn, and Klarna also shared their market position, distribution, and marketing channels and were perceived as the top four closes competitors by market capitalization and turnover.
