How fintech firms can develop great products to stay ahead of the curve

Less than a decade ago, paying through digital means such as QR codes was relatively unheard of in Indonesia. In fact, it was only in 2014 that the country’s central bank introduced a cashless payment initiative. However, adoption of digital payments has jumped significantly since then: The total transaction value recorded in 2022 was US$72.09 billion, a 77% increase from 2020.

Indeed, fintech has been growing rapidly in Indonesia. Within just three years of launching a national standard QR code, the central bank has expanded the initiative to include a cross-border payment linkage with Malaysia. New solutions, such as buy now, pay later (BNPL), have also burst onto the scene in recent years.

Photo credit: bignai / 123RF

BNPL adoption has also been swift. Two years after launching its BNPL feature in 2018, Tokopedia recorded a 100% increase in such transactions.

These rapid developments mean that fintech has become one of the most competitive and promising industries in Indonesia, presenting mass opportunities to consumers and businesses alike. To stay ahead of the curve and ensure that they don’t lose out, firms in the sector must account for several factors to develop the right products.

Developing seamless products

Firms should always have both the consumers’ and merchants’ interests in mind during product development. One mistake that fintech companies commit in the early stages is focusing on creating a seamless and easy-to-use interface for consumers but neglecting the merchant’s experience, explains Pratuyush Prasanna, head of merchant payments at GoTo Financial. The platform, a unit of regional super app GoTo, provides financial services and comprehensive solutions to retailers.

At Tech in Asia’s recent Product Development Conference , Prasanna shared that having a good UX for both parties is important because it enhances and improves interactions for both merchants and consumers. In turn, this leads to greater merchant retention for fintech firms and the continued adoption of their products, which is especially important in further driving consumer growth. Case in point: Midtrans, GoTo Financial’s payment gateway, experienced a 116% increase in transaction value from 2020 to 2021.

Pratyush Prasanna (top right), GoTo Financial’s head of merchant payments, and Hana Abriyansyah, GoTo Financial’s head of information security for business solutions (bottom) at Tech In Asia’s Product Development Conference / Photo credit: Tech In Asia

Fintech companies should also pay attention to users’ needs in online spaces, particularly for digital payments. “Remembering customer preferences and asking for the least amount of data inputs is very important to make sure payments are seamless,” said Prasanna.

Additionally, companies need to ensure that available payment methods are clearly stated and easy to navigate. Not only does this make the purchase process smoother for consumers, but it helps ecommerce merchants reduce drop-off rates – a notable problem in the ecommerce industry.

Balancing multiple considerations

To create good fintech products, there are plenty of external factors to keep in mind, especially when it comes to regulations and risk management.

To that end, fintech firms have to know how to effectively mitigate risks to avoid falling afoul of the law and protect themselves as well as their users. To do this, they must have good product managers (PMs) that are empowered with the right product development processes.

Prasanna believes that good PMs should have an extensive knowledge of the competitive landscape, are committed to understanding their customers on a deeper level, can choose the right goals and business models, and are familiar with the ins and outs of situations on a local level.

A local merchant using a Moka, a point-of-sale platform under the GoTo Group / Photo credit: GoTo Financial

These qualities allow them to strike a balance between prevention and mitigation, which in turn helps them effectively manage risks and the customer experience.

Besides performing a balancing act, good PMs must be ready to adapt to the constantly evolving state of fintech rules and regulations.

“In fintech, the rules of the game are slightly more complex, but you need to play the game according to the rules,” said Prasanna. “The way new PMs should look at it is: OK, this is a new game. This is played with a different set of rules – let me understand it and make sure that I follow through.”

That said, prevention is always better than mitigation, according to Hana Abriyansyah, head of information security for business solutions at GoTo Financial. This is where implementing the right processes comes in.

Photo credit: ammentorp / 123RF

In GoTo Financial’s case, it decided to embed a security implementation process into the product development cycle at the earliest stage. The goal was to minimize the number of vulnerabilities being deployed into products and environments. In doing so, the company ensures high-quality output with minimal friction and improved agility to further support development processes.

It also helps organizations balance risks and many other considerations by giving PMs more time to manage them.

“In the early days, we only balanced risks and benefits. But nowadays, we’re striving to balance between security, the cost and benefits, and the convenience and experience of our users,” said Abriyansyah.

Companies must also see to it that different teams – such as information security and product development, for instance – see each other as partners in creating products. Abriyansyah pointed out that embedding risk assessments early into the company’s processes is not just the PM’s responsibility; the security team must be involved as well. Cultivating a strong partnership mindset across the organization can help reduce friction and encourage continuous improvement of the product development processes.

Bright future in Indonesia

Indonesia’s fintech industry looks to be on the upswing as the sector is projected to rake in revenues of US$8.6 billion in three more years. Neobanking and digital payments, among others, are poised for strong growth.

Fintech companies have a lot to look forward to, as long as they continue to make seamless products for both customers and merchants and have a team that’s ready to face the constant changes in the industry.

As Prasanna put it, “The rules are constantly in flux. But by staying on top of these, one can always come out more successful.”

GoTo Financial wants to accelerate growth opportunities for businesses everywhere through a suite of digital services for consumers and merchants.

For more information, visit GoTo Financial.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.