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Hello reader,
Playing sports brings out my competitive side. While it’s a great way for me to release stress, I sometimes let my emotions take over to the point that I say or do things I end up regretting.
Many people are surprised by my competitiveness, probably because most of the time, I’m a pretty relaxed person who doesn’t seem to take things very seriously. I guess it goes to show how deceiving appearances can be, and the same is true for today’s featured story.
On the surface, it may appear that Indonesian digital banks are getting into close competition with their fintech partners as they shift to lending directly to consumers. However, things aren’t what they seem.
Today we look at:
- Digibanks going direct
- TikTok facing criticism for harming teens’ mental health
- Other newsy highlights such as Casio launching an AI emotional support pet and a Singapore-based fintech startup securing funding.
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To compete or not to compete?
Image credit: Timmy Loen
Digital banks in Indonesia, which normally distribute credit via their fintech partners, are shaking up the country’s peer-to-peer lending market by starting to offer loans directly to consumers.
While this change may appear to put these banks in competition with their partners, fintech players are largely unbothered.
- Same game, different players: Digital banks and fintech lending platforms serve fundamentally different markets, according to Entjik F. Djafar, chairman of the Indonesian Joint Funding Fintech Association. For example, digital banks can only target customers who already have a bank account, while fintech firms can cater to the sizable unbanked community that lacks a credit history.
- Uneven playing field: Fintech firms and digital banks are also regulated very differently in the country, with the former benefiting from a lighter touch. On the other hand, Indonesia’s financial authorities mandate that banks comply with credit distribution provisions, including ensuring that credit is disbursed to people who are able to meet commitments. Fintech P2P lenders don’t face such hurdles.
- Still partners: Despite offering direct loans, the country’s digital banks still see fintech platforms as one of their larger avenues for credit distribution, Nailul Huda, director of the Digital Economy Center at the Center for Economic and Law Studies, told Tech in Asia.
Read more: Indonesian digibanks encroach on P2P lending by going direct
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