Mastercard is working with open finance platform Ayoconnect to bolster financial inclusion in Indonesia.
“With open banking, the unbanked population in Indonesia will have access to various financial products, moreover, consumers can be responsible and aware of their digital financial footprint to fully understand their financial position and spending habits to monthly payments,” Ayoconnect announced on its LinkedIn page Tuesday (Jan. 31).
The company said the solution will be piloted this year, leveraging its connectivity to the open banking APIs (application programming interfaces) of Indonesia’s largest banks, combined with Mastercard’s tokenization, cyber and anti-fraud technology.
Based in Indonesia’s capital of Jakarta, Ayoconnect bills itself as Southeast Asia’s largest open finance API platform.
The company’s partnership with Mastercard came on the one-year anniversary of Ayoconnect’s Series B, which raised $15 million.
“After six years of building new rails for Indonesian finance, today Ayoconnect is the most robust and in-demand open finance platform in the country,” Ayoconnect CEO and Co-founder Jakob Rost said at the time. “We are building the AWS of open finance with the most complete offering globally so that we can power the companies of today and the tech unicorns of tomorrow. We are proud to receive the backing of some of the world’s most renowned investors.”
Indonesia has one of the world’s largest unbanked/underbanked populations, with estimates for that figure ranging from 140 million to 180 million (the country is home to more than 275 million people, according to the government’s most recent estimates).
Getting underserved populations active in financial services and away from cash-based transactions will take full-scale, joint efforts between traditional and nontraditional financial services players and regulators, PayU Global Payments CEO Mario Shiliashki told PYMNTS’ Karen Webster recently.
For the 1.7 billion consumers and 200 million small businesses that are unbanked and underbanked financial inclusion requires more than just technology, Shiliashki argued.
“It takes an ecosystem,” he said.
And that ecosystem can only come together if regulators pivot somewhat and expand their frameworks for data collection and use. Shiliashki told Webster that it isn’t just the FinTechs that are innovating new products and services to meet their consumers’ needs.
“Banks are trying not just to catch up, but to collaborate with FinTechs to provide better services,” he said.
These joint efforts make it easier for consumers and businesses to adopt new accounts that are backed by banks, although not necessarily “run” by banks, he said. The transaction accounts are thus the springboard for new experiences and services.
“Standards need to catch up in order to also increase the adoption of these services and the ability for FinTech to scale,” Shiliashki said, which then opens the door for widespread adoption of new offerings.