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What You Need to Know About Fintech

By Isny Dewi R

10 February 2020

Before using fintech services, it helps you to know the ins and outs of fintech first.

Fintech has become one of the most preferred financial solutions for the community. The National Digital Research Center (NDRC) defines fintech as an innovation in the field of financial service. The intended innovation is financial innovation using modern technology.

Ease of accessing various financial products is the main reason why many people love fintech. Unfortunately, not many people really understand the intricacies of fintech. So no wonder, if many people are become victims of illegal fintech fraud. Therefore, before using it, it helps you to know the ins and outs of fintech first, as quoted from World Economic Forum website.

1. What is Fintech?
Fintech is an abbreviation of financial technology, which refers to innovation in the design, service, and financial products. The fintech company uses mobile technology, big data, and customer analysis to determine the type of product needed.

The existence of fintech itself has had positive impact on society. As consumers, people do not have to pay too much because several segments have been removed. Fintech also opens greater public access to financial products.

2. Who are Fintech Actors?
Conventional companies and start-ups are the actors in fintech development. For start-ups, it usually doesn't look like bank or insurance company. Start-ups usually only provide certain services, with targeted customer segments.

Conventional banks, insurance companies, and other financial institutions are also very interested in fintech. The concept is combined with existing systems, to reach more community groups. In addition to making their own fintech, there are also financial institutions that choose to invest in existing fintech.

3. What about Fintech surveillance?
In operation, fintech start-ups are not like conventional banks or insurance companies, so start-ups cannot be monitored or burdened like conventional financial institutions. In some countries, the right form of supervision is still being considered.

While in Indonesia, the monitoring model developed is the Regulatory Sandbox. Companies can grow to a certain extent before being monitored through Bank Indonesia permit. The limit is if the floating fund reaches Rp 1 billion or has 300 thousand active users.

Fintech actually provides benefits, but also has the risk of loss with End User License Agreement (EULA) contract trait. This happened to victims of illegal fintech who did not read the entire contract. People are also advised to find out whether the fintech is illegal or not through Financial Services Authority (OJK) website.

4. Do You Still Have to Pay Debt If You Become an Illegal Fintech Victim?
One of the most popular forms of fintech in Indonesia is online loans (Pinjol), which provide ease of getting loan. Unfortunately, customers often do not read the terms first or find out more about related fintech.

Not infrequently, because of this, people also became victims of online loans because the interest is too many. There are even people who get unpleasant treatment if they are late in paying debts. After being investigated by the authorities, it turns out that the fintech who gave loans is illegal. When this condition happen, does the victim still have to pay the debt?

"Indeed we do not tolerate harassment, violence, but this borrower must pay the debt first. Do not because it is illegal so you don’t have to pay the debt. You still have to," said Chairman of the Investment Alert Task Force Tongam L Tobing, quoted from detikFinance.

5. How to Choose Safe and Legal Fintech?
Until now, the government is increasingly trying to oversee fintech peer to peer landing that offers online loans. Even so, people are also asked to be more careful and wise when choosing fintech. Then, how to choose safe and legal fintech?

- Access OJK website ( to ensure that fintech is legal and safe.

- Find out the ability to pay.

- Find out and fully understand the risks and penalties applied to borrowers.

- Make sure to use fintech services that have been registered in OJK.

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