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MCF-MMC ITB 2018 (1)

Attending Financial Technology Seminar in ITB Part 1: Digital Economy and Its Challenges

This weekend, I spent my time participating in seminar of financial technology for Indonesia held by ITB Department of Matematics. This event is part of biennial event which is Mathematical Challenge Festival and Mathematical Model Competition (MMC-MCF).

There are three motivation why I participated in this event. First, I want to spend by weekend by doing something very useful. Second, I want to share how I spent my weekend in this blog so this blog becomes rich with various topics. Three, one of main speakers in this event was Mrs. Sri Mulyani Indrawati, who is Indonesia Ministry of Finance. Who would miss this opportunity?

Before I entered East Hall of ITB, I googled what financial technology is ( I want to know general pictures of this event). Based on Wikipedia, financial technology or fintech is the new technology and innovation that aims to compete with traditional methods in delivery of financial services. The purpose of financial technology is to make financial services is more accessible to the general publics.

The seminar was divided into two session. First session was seminar and second session was talkshow. Speakers in the first session was Mrs. Sri Mulyani, followed by Mr. Sumit Popli and Mr. Dei Pramoda from McKinsey Indonesia. While speakers in the second session was Ms. Puput Hidayat from TCASH and Mr. Samuel Sentana from Tokopedia. I am getting very excited. I am really looking forward second session.

Me at MCF-MMC Seminar with sleepy eyes
Me at MCF-MMC Seminar with sleepy eyes

Digitalization, Financial Technology, and Indonesian Economy

Mrs. Sri Mulyani started her speech by explaining that people with strong background of mathematics have a lot of advantages. For example, when she was preparing her dissertation about micro economy in University of Illinois, Urbana-Champaign, she had to solve so many mathematical modelling. In addition, she explained that people who make a lot of money Wall Street are mostly people who have strong background of mathematics.

Mrs. Sri Mulyani explained that there are four main pillars of economy. These pillars shall be kept healthy so that our economic condition is healthy.

Four main pillars of economy
Four main pillars of economy that shall always be healthy

Function of monetary is to ensure that price is stable (to maintain inflation rate) and to exchange rate.

There are four institutions that are responsible to ensure that monetary condition in Indonesia is always healthy.

4 institutions works together to maintain monetary condition in Indonesia
4 institutions works together to maintain monetary condition in Indonesia

Related digital economy, Mrs. Sri Mulyani explained that its contribution is only 8% of Indonesian PDB (Pendapatan Domestik Bruto or Gross Domestic Income). So, it is still very low. It is because level of digital economy in Indonesia is still early stage, despite of internet penetration has reached 50% and smartphone users is already 67%.

Challenge of Digital Economy

Digital economy seems to create its own closed payment method, so that in monetary perspective, its existence will influence people behavior and policy. Currently, digital economy is still under regulated. In fiscal perspective, how to tax every transaction generated from digital economy.

Because this seminar is quite long, I will share you what I got from Mr. Dei Pramoda from McKinsey Indonesia and sharing session from TCASH team and Tokopedia Team in next post. Mr. Dei Pramoda explained about digital archipelago and what skills that we should have in digital era.

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