Unleashing the digital economy

This panel discussion featured:

• Dicky Kartikoyono, Assistant Governor of Payment System Policy Department, Bank Indonesia
• Hans Patuwo, Director/President of Financial Technology Business Unit, PT GoTo Gojek Tokopedia Tbk (“GoTo Group”)
• Megawaty Khie, Director, Channels and Strategic Partnerships, Southeast Asia, Google Cloud
• Terence Koh, Managing Director & Head of Technology, Media & Telecommunications, Sector Solutions Group, UOB

In this discussion, the panel shared their views on the impact of technology on economy and society.

1. The Digital Economy in Southeast Asia: The digital economy, especially in Indonesia, has witnessed significant growth, with a transition towards cashless transactions. Indonesia ranks 11th globally in e-commerce market size, with an estimated revenue of $45.28 billion USD in 2023. Approximately 75% of online purchases in Indonesia are made through mobile devices, surpassing the U.S. in mobile-first adoption. Indonesia's large and digitally-savvy population, along with its increasing GDP per capita, provides a significant opportunity for market players, especially in the fintech space.
2. Unleashing the Digital Economy: "Unleashing the digital economy" means enabling economic activities that would not have occurred without digital technology. Examples discussed include ride-sharing services like GO-CAR and e-commerce platforms like Tokopedia, which match buyers and sellers digitally, creating new economic opportunities.
3. The Impact on Businesses and Consumers: The digital economy has a significant impact on both businesses and consumers. In Indonesia, platforms like GO-JEK and Tokopedia have led to the creation of millions of registered drivers and merchants, driving economic activity. Research suggests that the digital economy could contribute 1-2% of Indonesia's GDP. However, there is still potential for further growth compared to more mature digital markets like China.
4. The importance of The Cloud: Cloud technology has played and will continue to play a crucial role in Indonesia's digital transformation: providing security, scalability, and environmental sustainability. Google Cloud sees Indonesia as a key market, with over 50% of its business in ASEAN coming from the country. Cloud infrastructure and generative AI are driving innovation and attracting investment, positioning Indonesia as a hotspot for technology development.
5. The Role of Central Bank in Digital Transformation: Clarity, consistency and a firm roadmap are essential in the roadmap set by the central bank, Bank Indonesia (BI). Their strong focus on the payment system as a key aspect of the digital economy, combined with the implementation of the QRIS (Quick Response Code Indonesian Standard) has facilitated digital transactions, especially for micro, small, and medium enterprises (MSMEs). It has also enabled cross-border transactions and regional integration.
6. The Government's Investor-Friendly Environment: Bank Indonesia collaborates closely with the Ministry of Finance to create a welcoming environment for investors. The government has placed a large focus on growth, stability, and inclusion in the payment system industry, adopting a principle-based approach to encourage innovation and open markets.
7. Investment and Growth Opportunities: Banking institutions like UOB see the opportunities in supporting the digital economy's growth. They provide financing for digital infrastructure, collaborate with hyperscalers, and engage in partnerships with enterprises and unicorns. The large and growing market in Indonesia makes it an attractive destination for digital investments and innovation.
8. Data Unification and Generative AI: The discussion also covered the importance of unifying data from various sources (particularly in Cloud services) to create a comprehensive customer profile via innovative data analytics. This approach enables highly personalised services based on predictive modelling, reflecting the changing behaviours of younger generations and crucially, improving customer and service experiences. Of course, this then needs to be reflected in the security precautions taken to mitigate cyber threats and ensure data integrity

In summary, the discussion highlighted the rapid growth of the digital economy in Indonesia, driven by mobile-first adoption, cloud technology, and innovative payment systems. The Indonesian government and financial institutions have been working to create a supportive environment for investment in this crucial area, to energetically position Indonesia as a hub for digital innovation and economic growth.

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