Huge swathes of Indonesia’s population don’t have a bank account, but that hasn’t stopped them from signing up for wealth management.
Claudia Kolonas, the founder of Pluang, an Indonesia-based wealth management mobile app, noted that in more developed markets, such as the U.S., individuals tend to primarily use banks for financial transactions, with wealth technology as an additional use-case.
«We're actually seeing something very different in Indonesia, where users are actually engaging with wealth tech platforms first, and a lot more times than even their banking and e-wallet counterparts, and I think that's a very interesting phenomenon that is very unique to the country,» she said while speaking on a panel at the DealStreetAsia Indonesia PE-VC Summit on Tuesday.
Financial Inclusion Still Low
Financial services inclusion in Indonesia remains relatively low, despite the Covid-19 pandemic boosting acceptance and use of digital financial services.
According to data in the 2019 Google, Temasek and Bain e-Conomy report, published pre-Covid, Indonesia had 92 million unbanked adults and 47 million who were underbanked, or who had a bank account but no access to credit, investments or insurance. Indonesia’s total population was around 273.5 million in 2020.
The 2020 e-Conomy report showed Indonesia posted a 44 percent on-year increase in the use of selected mobile banking apps for the January-to-September 2020 period.
Lifetime Value
Kolonas said her platform targets first-time investors, with more than 80 percent of its users under the age of 30.
«The retention of users is really off the charts. So once you really get a user onto your platform, the lifetime value is actually almost endless,» she said.
Kolonas said platform started with offering gold investments, as Indonesia is a Muslim-majority market, but has been able to graduate users toward more volatile products such as crypto and stocks.
Superapp Integration
Pluang has been integrated into Indonesian superapps, including ride-hailing player Gojek, payments company DANA, and e-commerce players Tokopedia and Bukalapak, which makes it more visible to a wider base of potential users. Pluang said in January it has more than four million registered users in Indonesia, with the January 2020 to November 2021 period posting a 22 times growth in monthly transacting users and a nearly 29 times growth in users with an active balance.
Jaygan Fu Ponnudurai, the CEO of OVO, another speaker at the Indonesia PE-VC Summit, noted his e-wallet and payment company has also used wealth management products to make its offerings stickier with consumers.
Targeting Power Users
OVO offers a money market fund to its «power users,» with the product allowing an easy redemption so users can transfer money from the fund to its OVO wallet with no delay, Ponnudurai said. The minimum investment size for the offering is IDR10,000 or around 70 U.S. cents, the said.
In October 2021, Grab – which offers services ranging from ride-hailing to food delivery to courier services to financial services – was reported to have boosted its stake in OVO to 90 percent.
OVO is Indonesia’s leading e-wallet player, with 20.8 million monthly active users as of May 2021, more than its top two independent e-wallet competitors DANA and LinkAja combined, according to a Momentum Works report published in July 2021.