Developments in digital
technology are growing rapidly. It can be said that the development of the
digital field is faster than the development of other fields. With the advent
of digital technology, urban society is increasingly facilitated in all aspects
of life. In the financial sector using digital technology has become
commonplace for urban communities. Accuracy, accuracy and speed are the attractions
of digital use in the financial sector. Financial technology (financial
technology), or more popularly known as FinTech, is also not a new development
for the financial services industry.
Understanding
of Fintech
In a number of
literature found various definitions of fintech in general and in the broadest
sense. Fintech addresses the use of technology to provide financial solutions
(Arner, et al, 2015). Specifically, FinTech is defined as the application of
digital technology to the problems of financial intermediation (Aaron, et al,
2017). In a broader sense, FinTech is defined as an industry consisting of
companies that use technology so that the financial system and the delivery of
financial services are more efficient (World Bank, 2016). FinTech is also
defined as technological innovation in financial services that can produce
business models, applications, processes or products with material effects
related to the provision of financial services (FSB, 2017). FinTech activities
in financial services can be classified into in 5 (five) categories, namely as
follows (FSB, 2017): Payment, transfer, clearing, and settlement (payment,
clearing and settlement). This activity is closely related to mobile payments
(either by banks or non-bank financial institutions), electronic wallets
(digital wallets), digital currencies (digital currencies) and the use of
distributed kasbuk / ledger technology (distributed ledger technology, DLT) for
infrastructure payment (Griffoli, 2017). These models aim to improve financial
inclusion and ensure greater consumer access to payment services and ensure
smooth functioning of the payment system. This model can also contribute to the
management of a large number of transactions and transfers and large
settlements between financial institutions deposits, loans and additional
capital (deposits, lending and capital raising). FinTech's most common
innovations in this field are crowdfunding and online P2P (peer-to-peer)
lending platforms, digital currencies and DLT. This application is closely
related to financial intermediation
Beginning
In Fintech
FinTech emerged
starting with industrial technological advances. The development of computers
and internet networks in 1966 opened up huge opportunities for financial
entrepreneurs to grow their business globally.
In the 1980s, banks
began to use a system of recording data that was easily accessed through
computers. From here, FinTech seeds began to appear in the bank's back office
and other capital facilities. In 1982, E-Trade brought FinTech to a brighter
direction by activating the electronic banking system for investors. Thanks to
the growth of the internet in the 1990s, E-Trade financial models are
increasingly being used. One of them is an online stock brokerage site that
makes it easy for investors to invest their capital.
1998 was the time when
banks began introducing online banking to their customers. FinTech is also
becoming increasingly easy to use for a wider community, also increasingly
known. Practical payments and far different from conventional payment methods
make FinTech's development even more intense. Financial services that are more
efficient using technology and software can be easily achieved with FinTech.
The
development of FinTech in Indonesia
Fintech is known by the
Indonesian people which was triggered by an invasion of technology from abroad
during the 80s to 90s. Companies that use FinTech have only emerged in recent
years. one of them is SyarQ, the credit card installment platform is a fintech
company in Indonesia. SyarQ makes it easy for people to access capital while
looking for alternative investments. SyarQ can help entrepreneurs and beginners
and provide attractive and reliable investment alternatives for each lender.
The increase in FinTech's
growth in Indonesia was greatly helped thanks to the open nature of banks and
the government. For those who are conventional, the FinTech business can be
considered the key to the destruction of the banking sector. However, it is not
like that. The FinTech business is actually able to collaborate well with
banks. The involvement of the FinTech business with the Indonesian banking
system also expanded the financial services network for local residents, so
that more customers and financial inclusion in Indonesia grew. This will also
be very good for the development of financial products in Indonesia, which is
currently relatively low.
Blockhain
Technology System in Fintech
Blockchain is like a
cash book in a bank that records transactions. However, transactions via the
blockchain can be seen by all users. In contrast to transactions in banks that
can only be accessed by the authorities.
This technology system
was first used in Bitcoin by Satoshu Nakamoto in 2008. This concept takes the
concept of cryptographically made by Stuart Haber and W. Scott Stornetta.
This allows
transactions between A and B to occur without intermediaries. In a short time,
cheap and safe, this technology can be better than banks or other institutions.
In fact, it can be accessed by anyone. This changed the centralized approach to
being decentralized through the system.
Regarding security,
this system guarantees the security of users. For example, as quoted by Tom
Chitty from CNBC, a farmer lost a land certificate due to a flood in his house.
All data just disappears. If the certificate is stored in a bank or other
agency, there is still no concrete evidence of ownership of the land. This
certainly makes the farmers will be expelled from the land. However, if he uses
the blockchain, it won't happen. Because the land certificate has been safely
stored in the system.
In addition to Bitcoin,
several banks in the UK, Canada, Singapore and Malaysia have also used this technology
to save time on operational costs. This technology is not only used in the
financial industry, but also in marketing, health and government. Some
countries have started using the system like Estonia which is used in hospitals
for patient medical records. In fact, the country will use it for general
elections. In the United States, several companies also use it to assist
corporate operations. In the United Arab Emirates, Dubai's regional government
will use it for government in 2020. Likewise with China, they use this system
to resolve food security. Whereas in Indonesia this system still needs to be
studied to be applied to fintech in Indonesia.
The use of technology
such as the blockchain will make lenders, recipients of loans and deposit money
more simple, transparent and efficient. That is, community participation in the
economy can be further enhanced.
Concept
of Distributed Systems
FinTech's activities in
financial services can be classified into 5 (five) categories, as follows (FSB,
2017): Payments, transfers, clearing, and settlement (payment, clearing and
settlement). This activity is closely related to mobile payments (either by
banks or non-bank financial institutions), electronic wallets (digital wallet),
digital currencies (digital currencies) and the use of kasbuk / ledger
technology distributed (distributed ledger technology, DLT) for payment
infrastructure (Griffoli, 2017). These models aim to improve financial
inclusion and ensure greater consumer access to payment services and ensure smooth
functioning of the payment system. This model can also contribute to the
management of a large number of transactions and transfers and large
settlements between financial institutions. Deposits, loans and additional
capital (deposits, lending and capital raising). FinTech's most common
innovations in this field are crowdfunding and online P2P (peer-to-peer)
lending platforms, digital currencies and DLT. This application is closely
related to financial intermediation
Benefits
of using fintech in Indonesia
1.
Giving Ease in Financial Affairs
The
presence of fintech will indirectly provide convenience in financial matters.
Not only easy, it can even help faster and safer. Users can conduct financial
matters ranging from payments, capital searches, loan funds, to stock
investments without having to come to a bank or financial institution.
2.
New Breakthrough in Financial
Transactions
With
fintech, all financial transactions can of course be done easily and safely,
even anytime and anywhere. You only need to use electronic equipment, such as
computers, laptops, or smartphones, to access all financial transactions. That
way, indirectly the people who previously found it difficult to access
financial services, now become easier when using fintech services. Of course
this will also have an effect on increasing people's purchasing power on
financial products on the market which can then make people reach available
financial products
3.
The presence of Fintech Facilitates
Access to Financial Products
The
presence of fintech, especially in Indonesia, helps anyone access financial
products. Fintech's ability to reach all people and facilitate all financial
transactions is a distinct advantage. No wonder if Fintech is now a mainstay of
people who want to be smoothed out in financial matters.
Weaknesses
of fintech use in Indonesia
1.
Lack of attention to risk management
Every
business entity must have a business risk. This is not considered by some of
the founders of Fintech. Even though by knowing the risks that might be caused,
the company knows how to handle or minimize the risks that arise.
2.
Not too trusted by the community.
We
all know the weakness of digital technology, especially in Indonesia. Lots of
hackers are irresponsible and take data for their personal interests. This
makes many people less confident with digital technology, especially for people
who have experienced it.
In Indonesia, there are
Fintech Indonesia, the association of financial technology service providers.
Its members are bareksa, cekaja.com, veritrans, doku wallet, kartuku, mandiri
ecash, and so on. The presence of fintech is even believed to be changing the
financial world. Because along with the increasing number of internet users,
and mobile phones, the market share taken by Fintech (the payment sector) is
very wide, because the payment method covers all economies. Maybe for this
reason fintech looks like a dangerous threat.
So in my opinion about
fintech technology profit or loss? Every person's perceptions may vary but I
will express my opinion. In my opinion, the existence of fintech technology is
very helpful and easy for the community such as services that are often used
for users of online transportation Go-jek is certainly no stranger to a Go-pay
payment system that is in the application. Yes, Go-jek users can make a deposit
through Go-pay so that the payment can be made non-cash. In addition, customers
are also spoiled with discounts that are quite tempting and prizes that can be
exchanged from points earned. Apparently the presence of Go-pay is included in
an online financial services transaction that is the most developed at this
time. The Go-jek party cooperates with a company called PonselPay to succeed
the Go-Pay transaction process. Gradually, the presence of Go-Pay is
increasingly refined with the aim of making it easier for customers to
transact. Aside from being used for transactions, Go-Pay has grown rapidly with
a cash withdrawal feature and balance transfer. This shows that the presence of
Go-pay is really needed and many uses. So, to develop this Go-Pay product in
the near future it will be used for transactions outside of Go-jek products.
How to fill in the balance on Go-pay is also easily adjusted to customer needs.
Where you can fill it through the minimarket, through the Go-Jek driver, and
also through the ATM. That is, Gopay really helps us not to spend money in
physical form especially sometimes I myself like being careless not carrying
money in physical form with. But maybe because the development of fintech
technology in Indonesia seems to be too late to enter compared to other
countries, so there are still people who haven't used Fintech technology much.
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