5 tips from GoTo and Traveloka for the future of fintech in SEA

Southeast Asia’s consumers currently lack access to financial services. Banking penetration in Southeast Asia (SEA) sits at a mere 50 per cent. In contrast, banking penetration rate is 95 per cent in the US and UK.

This provides an opportunity for tech companies to bridge the gap in financial services. Looking to not only better serve customers, but also to empower stakeholders such as small businesses and delivery partners, Indonesian tech giants GoTo and Traveloka are ramping up their fintech offerings.

At a recent webinar by EDB with Patrick Cao, President of GoTo, and Caesar Indra, President of Traveloka, we discussed their tips for delivering and scaling fintech products across the region, building the right capabilities, and tapping Singapore as a globally connected tech node for growth in SEA.

Check out their key insights below.

1. Work with your customers to raise awareness of fintech products
   

   Financial literacy varies across diverse SEA. For example, while 59 per cent of adults in Singapore are financially literate, it is 32 per cent in Indonesia, according to the S&P Global Finlit Survey. With a lack of knowledge in basic finances, customers are also leery of digital financial services.

   For Traveloka with its start as an online travel agency, it was challenging to persuade Indonesian customers more comfortable with cash to use their platform for high-value transactions in travel.

   Caesar shared: “We needed to make a conscious effort to educate the market on basic finances. This is important for us, as we want to not only fulfil our customers’ lifestyle aspirations but also enable them to realise it in a responsible way.”

   With GoTo’s platform offerings spanning from transport and food, to e-commerce and fintech, it is similarly key for the company to educate its stakeholders across the ecosystem.

   “We are focused on providing a seamless and transparent product so the customer, the driver and the merchant know exactly what the terms and conditions are, and we continue to build that educational journey,” Patrick explained.
    

2. Be transparent in your products and services to build customer trust
   

   For both GoTo and Traveloka, customer education goes together with transparency: they are upfront with their offerings, and help customers understand what they are signing up for.

   “We build transparency into our products’ UX and UI," Caesar explained. For example, Traveloka’s online credit lending service, PayLater, is explicit in the monthly instalments expected of customers.

   Transparency is also integral in assuring customers that their data is managed securely. “Both of us are in the business of trust,” Patrick said.

   Both companies are also stringent in ensuring that products are compliant with local regulations – once again, underscoring a responsibility to customers.
    

3. Identify the right expertise you need for your regional team
   

   Building the right capabilities is at the core of both companies’ fintech achievements so far.

   Risk management and control, data analytics and cybersecurity are a few of the critical skillsets GoTo and Traveloka cite in creating successful fintech products.

   Traveloka has been building such teams in Singapore. Their Singapore-based data science, cybersecurity, and cloud-native architecture teams work closely with other regional teams to quickly innovate and launch products in SEA. “Singapore offers a world-class talent pool, bringing together the best talent locally and across the region,” Caesar affirmed.

   Similarly, for GoTo, while operating largely in Indonesia, “a large part of the talent and expertise that we need is based in Singapore. Most of the talent that we have in Singapore have quite a strong affinity for Indonesia, given that it is a short plane ride away,” added Patrick.
   
   

4. Find like-minded partners in Singapore, a tech node in the heart of SEA
   

   Besides a hub for talent, Singapore also provides access to key partners for GoTo and Traveloka.

   “Singapore is a great place in terms of access to ecosystem partners and other areas of fintech expertise that our teams and leaders can tap on,” said Patrick.

   With Singapore home to 59 per cent of Asia regional headquarters for global tech companies, he added that a rich talent pool and presence of global companies “make Singapore an ideal place to have that regional ecosystem sharing and conversations that enrich our own knowledge and ability to build high quality products.”

   Singapore has also been a partner for Traveloka for innovating in a “vibrant, supportive” fintech ecosystem, said Caesar.
    

5. A curious, experimental mindset serves you well in fast-growing SEA
   

   Where once traditional financial institutions, such as banks and insurers, and fintech players might be competitors, they are now close collaborators in helping customers access financial services, as both GoTo and Traveloka attested.

   Working across non-traditional lines is part and parcel of serving fast-changing SEA. Patrick shared that it is critical to “have a curious and experimental mind, and the ability to unlearn, relearn and localise” successes from more developed markets such as the US and China.

   Tech companies in SEA are well-positioned to pioneer solutions and meet the needs of increasingly affluent consumers. Where financial institutions might lack information, “we provide the technology to bridge the gap,” Caesar said.

   Patrick added: “We are very much at the embryonic stage, where fintech could end up evolving similar to other fast-growing markets like China.”