Dong Shou, co-founder and COO of ADVANCE.AI, delivered a speech at the 3rd Wild Digital Indonesia Convention held in Sheraton Grand Jakarta Gandaria City on 26 November 2019. In the speech, Dong Shou said that the Indonesian ID card (KTP) is at risk of being forged. The ID number (NIK) can easily be tampered with by fraudsters. If a fintech company only uses the ID card as a debit and loan voucher, they will face an extremely high risk of fraud.
"Traditional banks and lending institutions generally assess the background of the borrower through interviews, salary verification and other methods to consider whether to approve the loan. Among them, face recognition is the only voucher that cannot be tampered with. When financial companies cannot obtain data from the local population or civil registry to assist in risk control work, the use of artificial intelligence technology for facial recognition to prevent fraud becomes critical and important." Dong Shou believes: "Face recognition is an important part of fraud prevention, the method can prevent the occurrence of frauds such as imposters and payment defaults."
According to the data released by Otoritas Jasa Keuangan, as of September 2019, the total loan amount of Indonesia's P2P online lending platform reached 60.40 trillion IDR. An increase of 166.51% compared with the 22.66 trillion IDR loan in December 2018, the financial activity in the field of fintech innovation and digitalization is continuously increasing.
Dong Shou believes that fintech is not just to obtain micro-loans; it will promote Indonesia's macroeconomic development if use rationally. Like banking, fintech can help secure financing in other areas.
According to Dong Shou, a fintech company in China is focusing on providing loan services to unemployed women, and Indonesian fintech companies can also adopt a similar business model. "ADVANCE.AI is currently working with an Indonesian fintech company on a project to provide financial assistance to farmers, hoping to improve their lives or businesses by helping them to get priority in obtaining funds. We believe that helping farmers obtain loan assistance will be more conducive to improving their lives." Dong Shou believes that "Agriculture + Finance" will become one of the most promising cross-border cooperation areas in the future.
△ Dong Shou, Co-founder and COO of ADVANCE.AI, delivering a speech at the 3rd Wild Digital Indonesia Convention
Fintech can also expand to more B2B market segments. "I think that many fintech companies in Indonesia have done a very good job in exploring B2B! Such development will be precious to the future development of the Indonesian economy, and for ADVANCE.AI, it is both an opportunity and a challenge." Dong Shou said.
At present, the Indonesian government actively supports the local development of fintech. Besides, as the balance point for reducing policy risks and opening up innovation and open space in Indonesia, the development of the fintech industry should also take into account the actual situation of the overall macroeconomic situation, ecosystem and industrial dynamics. It is precise because of this that fintech will surely be able to achieve a broader range of inclusive financial services in the future, and technology-based financial innovations will increasingly exert more significant potential.
