The Future of Banking: Fintech or Techfin?

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Nowadays, the banking industry has experienced rapid development. Over the past few years, conventional financial institutions and unconventional fintech companies have understood that collaboration between payment service providers and conventional banks can grow significantly in a long time. At the same time, technology companies are offering droves of financial services by creating high-tech solutions.

The purpose of this collaboration are a strategy to bring from both parties namely fintech companies and ordinary banks to jointly create entities that are stronger than stand-alone. For most fintech companies, they have a modern mindset and endless innovation. Do not forget its agility in adjusting the market and consumers and the infrastructure built for the digital world. This is a big advantage that conventional financial institutions do not have.

As for banking institutions, they have a larger consumer scale and stronger public trust. They also have sufficient capital and extensive knowledge about domestic financial regulations.

According to the 2018 Fintech World Report from CapGemini and LinkedIn, who are collaborating with Efma, “Most successful fintech companies mostly have fairly narrow consumer segmentation. Unfortunately, they did not get a good response from conventional financial institutions. However, they succeeded in attracting the attention of users and even benefited tremendously from their own businesses. Meanwhile, conventional financial institutions have quite broad consumers and dan sufficient capital ’. The difference is that conventional financial institutions have a bureaucratic system that “holds” their movements. “

The challenge faced today is the ability to build a financial environment where collaboration between the two parties (fintech, techfin, and conventional banks) is needed so that consumers can enjoy maximum digital financial services.

Fintech & Techfin


The difference between fintech and techfin is based on the institutions that protect it. Fintech usually refers to a company or institution where financial services are delivered through better experience using digital technology to reduce costs, increase revenue, and reduce disputes.

If you are still confused, an example of a fintech service is the mobile banking service offered by conventional banks. For more general purposes, fintech refers to non-conventional financial services such as PayPal, Zelle, and others. As for techfins themselves, they are usually referenced by technology companies that find solutions for financial products as part of a broader service offering. An example is online payment through an online motorcycle taxi application, Alibaba & Tencent (BAT) in China.

A few years ago, Jack Ma, the technology visionary, Co-Founder and Executive Leader of the Alibaba Group, described the obvious difference between Fintech and Techfin.

“There are two great opportunities in the financial industry in the future. One is online banking, where all Conventional Banks digitize all services; and the second is financial online, where this business will be led not by conventional banks, “- Jack Ma

In both types of online banking services, the success of financial institutions and payment service providers will be based on the ability of business people to collect consumer data until the right data analysis. And also, real-time payment technology innovation.

Why Do Many Consumers Switch to Fintech and Techfin?


Reported by Kompas (18/09/2018), until April 2018 fintech in Indonesia has managed to reach 1.47 million borrowing customers with a value of Rp. 5.42 trillion.

Did you know that they consist of a group of consumptive people who have a high urge to consume an item, such as gadgets, clothes, food, etc., due to lifestyle demands. Fast process without guarantee and easy access to encourage them to use this facility.

If we look deeper into Fintech Indonesia, it turns out that almost all of them collaborate with conventional banking. That is, techfin companies in Indonesia still rely on expensive funds and cannot be used to play financial inclusion.

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