Tuesday, May 7, 2019

Will fintech revolutionize everything?

The title above seems exaggerated, doesn’t it? But one thing for sure that we are living in a world where technology alters many practices of doing something. I am concerned that the revolution in finance is inevitable and we are now the part of this revolution. As people who make financial transactions in our daily activities, we will have to adjust ourselves to many things as they have somewhat changed.

In the past, money transfer technology at a bank was remarkable. As an example, for supporting my study in Bandung around 2005 to 2009, my parents in Garut transferred some money using bank transfer (wire) to my account. This was somewhat progressive because previously, our parents had to go to the post office to take some money wired by someone at somewhere. However, bank transfer practice seems to be passé or maybe too traditional for some people because I now witness that money transfer can be done using an app in our smartphone. Yes, you might have ever done this before where you sent some money using OVO or GoPay to your friend’s account. Well, this is a new thing for my parents, they may not have imagined it before. Besides, you also may have encountered where several sellers at Instagram now accept or prefer payment using OVO. This is indeed a result of technology which changes our way in transferring money or making payment.

In addition to changing our way of transferring money, technology also changes our way in obtaining loan for our consumptive or productive activities. In the past (and of course today), people went to the bank for applying for a loan. This money can be used either for capital in doing business or for buying anything we wish. But today, we just tap on our cellular phone, installing apps of fintech firms. They can give us a loan or facilitate us to buy the products we want at an online market place. As an example, you can buy a new laptop from bhinneka.com, shopee, or jd.id by registering yourself as a user of Angsur. Angsur is a company which allows us to purchase a particular product available online using an Islamic contract. This business model is so lucrative that making hundreds of fintech firms operating in Indonesia. Some of them are illegal though since they have not complied with the rules of financial services authority (OJK).

Another thing that may change our financial transaction is when we want to invest our idle cash. Some people might have confused about how to invest their money. But the wise people may go to the capital market as the stocks may give higher potential returns (with higher risk level as well). Nevertheless, in today's life, I again witness that people can invest their fund in fintech firms such as EthisCrowd or InvesProperti. These two Islamic fintech firms allow anyone who has money to invest his or her money for purchasing or developing a house or building. These two firms are categorized as crowdfunding which collects fund from many people for funding a project or something. They argue that this business model allows investors to have averagely higher returns as the property price keeps increasing day by day, especially in big cities in Indonesia.

I am grateful as I am the part of a generation who witnessed several transitions in technology and many aspects of this life. I am happy that now I can use a PC or laptop to write this writing, but I am also more joyful because I realized that this is a powerful movement from using typewriter years back ago. In financial transactions, I also see that several things have changed. I recognize that any remarkable change or revolution may have a side effect or even a destructive effect for particular parties or people. But I hope that these changes can bring betterment for human’s lives in the year or so to come. Admittedly, it has also been a part of mine as an academician to do it.    

(Written on Argo Parahyangan Train, May 7, 2019)