Indonesian Australian Business Week
Last week saw some exciting developments for Airwallex internationally as our Head of Partnerships and Sales, Joe McGuire jetted off to the Indonesian Australian Business Week (IABW). The event, headed up by Honourable Steven Ciobo the Minister for Trade, Tourism and Investment, was initiated by Austrade to forge new Australian business connections with our geographical neighbours.
The IABW’s program featured a combination of seminars, roundtables, site visits, product displays and networking opportunities and covered a range of sectors from tourism to sustainable development.
The trade conference could not have come at a better time since relations between Australia and Indonesia’s leaders are at an all-time high. A Free Trade Agreement has been publicly confirmed for 2018, meanwhile Prime Minister Malcolm Turnbull and President Joko Widodo are said to be on excellent terms with one another. Mr Turnbull even flew to Jakarta to attend the week’s gala dinner alongside Steven Ciobo.
Indonesia’s fintech think tanks Mandiri Bank Innovation Lab and Slipicon Valley (spelling intended) opened up their doors for exploration. Mandiri Bank’s CEO gave insights into the Indonesian fintech developments, while Slipicon Valley shared their unique innovation space in Kejora where replicating ideas from overseas back on home-turf is lauded and even encouraged.
The week came to a head when Joe met with the representatives of Indonesia’s central bank (Bank Indonesia) and the Financial Service Authorities (OJK), through which he was shown the scale of Indonesia’s growth, which he says, are on a par with China at the turn of the century.
Indonesia, with a population of 260 million and a forecast of almost 6% growth in GDP this coming year, is becoming the next big space for innovation, while being our closest neighbour and one of the world’s most exciting, emerging economies. Nearly two thirds of the country don’t own a current bank account while internet use is increasing daily, meaning there is a huge vacuum in the market left for fintech to fill.
While some large obstacles remain, such as a limit on foreign investment, regulatory bodies are beginning to catch up with new developments to allow new conceptions in fintech. Regulators such as Pak Junanto Herdiawan from Bank Indonesia who attended the event, are excited about the changes taking place within their jurisdiction. He explained to Joe that his corporation have been implementing new parameters which encourage and nurture fintech innovation, including the initiation of a regulatory sandbox for new businesses to test out their ideas without legal barriers.
The latest changes from the BI and OJK are the result of a boom in the industry over the past decade: 160 fintechs have been established in the country and there have already been a number of local wins, including DOKU (a digital wallet) and Modalku (a peer-to-peer lender platform). If regulations continue developing at this level, Indonesia has a high chance of becoming a global player in the fintech space.
Despite Indonesia’s proximity to Australia, the country does not rate in Australia’s top ten trading partners. As Australia, particularly Perth look to diversify their economy away from mining, Joe says, Indonesia should be a key priority.
Joe with Prime Minister Malcolm Turnbull