The regulators of Indonesia and Singapore share a common interest in promoting innovation in financial services to enhance financial inclusion within the region.
Meeting both interest, the Financial Services Authority of the Republic of Indonesia, Otoritas Jasa Keuangan (OJK) and the Monetary Authority of Singapore (MAS) have signed a Memorandum of Understanding (MOU) to strengthen cooperation in financial technology (Fintech), and also to foster innovations in financial services.
The signing of the MOU that took place on the sidelines of the Indonesia-Singapore Leaders’ Retreat on 11 October 2018 in Bali, is meant to facilitate information sharing on emerging Fintech market trends and developments. And also to promote joint innovation projects between the two countries.
As part of the MOU, the authorities in both Indonesia and Singapore are establishing a framework to help Fintech companies thrive by making them better understand the regulatory regime and opportunities in each jurisdiction.
This in turn should lower the barrier of entry for Fintech companies looking to make their forays into each other's markets.
Amid funding challenges, Fintech companies in Southeast Asia are showing growth aspiration.
About 90 percent of Fintech companies in the region are planning to expand their foothold beyond their current market, that according to the ASEAN Fintech Census 2018 study by EY, that surveyed 170 Southeast Asia-headquartered Fintechs across 16 key subsectors including payments, blockchain, money transfer, data analytics and robo advisory.
The survey also found that 61 percent of Fintech companies are planning to achieve revenue growth within 12 months, with 46 percent of respondents expecting to achieve a compound annual growth rate (CAGR) of 30 percent for their revenue.
With many Fintech companies believe that they can compete internationally, more than 80 percent of respondents are planning to expand outside their home or current market in the next 12 months. And this MOU presents a good opportunity to strengthen cross-border efforts to promote the Fintech ecosystem in ASEAN.
Wimboh Santoso, Chairman of Indonesia Financial Services Authority, said the OJK is looking forward to fostering a closer collaboration with MAS to support the development of Fintech and innovative financial services across the two jurisdictions.
Ravi Menon, MD of MAS, added that Singapore and Indonesia have vibrant Fintech sectors, and MAS and OJK share a common interest in promoting innovation in financial services to enhance financial inclusion within the region.
Temasek Foundation International (TF INTL) and Ngee Ann Polytechnic (NP) are partnering with Indonesia’s Ministry of Research, Technology and Higher Education (MoRTHE) to implement a programme which facilitates an exchange of knowledge among academia, industry partners and regulators in Fintech.
To lay this out, TF INTL committed to provide $523,000 for the cross-border programme.