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Demand for digital payments rises in Indonesia; 2 finance leaders opt for collaboration

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Financial service providers Dana and LinkaAja are exploring avenues for potential collaboration in the coming months to bring Indonesia’s payment ecosystem at par with global leaders.

At a forum in Jakarta, Indonesia, representatives of both firms expressed a willingness to share resources for the greater good while hinting at a wholesale embrace of emerging technologies. Top-tier executives from both companies pointed at artificial intelligence (AI) and blockchain technology use cases in finance that are subject to government policies.

Dana’s Chief Technology Officer Norman Sasono and LinkaAja’s Chief Commercial Officer Rendy Nugraha shared the stage during the Asian Banking and Finance Forum 2024, exchanging ideas to match the pace of rapid industry-wide digitization.

Rather than operate a one-sided strategy, Sasono disclosed that the incoming changes to internal and external processes will revolve around the consumers. Dana says it is experimenting with a raft of strategies to receive client feedback, including surveys, social media comments, and mobile app data.

“The most important thing on how to adapt with the demand of the customer is to get feedback from the customer,” said Sasono.

Nugraha said that LinkaAja is also adopting a similar strategy toward introducing changes, with the executive touting a “multi-faceted strategy.” LinkaAja appears to be tinkering with several AI personalization features and high-level partnerships with technology firms to gather end-user insights.

Although both firms say they will consult extensively with their customer base, there is a consensus that innovation will be essential to bring Indonesia’s payment ecosystem up to speed.

A potential collaboration would see both firms leverage their respective strengths to expand upon existing payment services. Dana could enter the lending and insurance space while using LinkaAja’s extensive reach in Southeast Asia to broaden its horizons to Malaysia, Singapore, and Japan.

For LinkaGe, the partnership is expected to enable the financial firm to explore use cases in retail, transportation, supply chain, and oil and gas.

“We want to collaborate instead of fighting each other to help the nation get financial inclusion,” said Nugraha.

Not all smooth sailing

While the planned partnership has triggered a buzz in the ecosystem, skeptics argue that integrating emerging technologies may be an uphill climb for both entities. They rest their argument on the Indonesian government’s hard stance toward blockchain in finance and the planned double taxation of digital currencies.

However, fresh capital injections from Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA) may ease the climb for both companies, while the proactive government stance is expected to protect investors from black swan events.

The country has previously launched a national digital currency exchange in a valiant attempt to protect residents and ensure uniformity of operations. Other stringent rules include the requirement of two-thirds of the board of all digital asset firms in the country to be Indonesian and a clear separation of clients’ funds to prevent commingling with proprietary assets.

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