The role of financial technology to increase financial inclusion in Indonesia

Abstract

The growth of digital technologies has changed the way of doing financial transactions. Even though the transaction value for financial technology in 2018 grew by 24%, the financial inclusion rate in Indonesia is still low, with 64% unbanked. The aim of the study was to analyze the factors of the growing digital technology that influence customer decisions in choosing financial technology services using customer knowledge as the intervening variable. The growing digital technology is measured using social networking, regulatory services, and financial service facilities variables. The sample of this research focused on the microsegment customers located in Java Island. Statistical data are analyzed using Algorithm PLS. Results show that customer decision in choosing financial technology services was strongly influenced by customer knowledge. Customer knowledge was formed from information gathered from the social network, the formal assurance by the government, the financial service facilities, and financial inclusivity. The study recommends a need to educate, promote, and provide adequate information to increase familiarity and literacy rate with regard to financial technology. The study also recommends an urgent clear government regulation to protect the interests of customers and industries.

Factors Influencing Small Medium Enterprise’s Behavior in Adopting E-fulfillment Services

“…The finding was aligned with the research of Kurniasari (2021), who mentioned that perceived usefulness had creating customer trust in adopting the new technology. This study supported the result of the study provided by Sudarsono, et.al (2020) who mentioned that perceived usefulness related with the ability of the new e-fulfillment services to create functional suitability by giving more completeness, correctness and appropriateness value.…”

“…The Perceived Usefulness (PU) was measured by two indicators: functional suitability (PU1) and performance efficiency (PU2) (Kurniasari, 2021).…”

“…The TAM theory was further becoming Unified Theory of Acceptance and Use of Technology (Phonthanukitithaworn, et.al, 2016) by adding another variable that was related with the Perceived Security and Risk Free (Kurniasari, et. al, 2021).…”

“…Perceived usefulness related with the ability of the new technology in assisting the customers to finish their works (Kurniasari, et. al, 2021) was the main consideration in customers intention in adopting this new technology (Phonthanukitithaworn, et.al, 2016).…”

Determinant Factors of Adoption of Fintech Payment Services in Indonesia Using The UTAUT Approach

“…Indonesia is a collectivist society which means it has a high preference for a strongly defined social framework in which individuals are expected to conform to the ideals of the society and the groups to which they belong. This collectivism culture will strengthen the social influence effect in creating customer trust through social networking, families, and friends (Kurniasari et al, 2021).…”