Sri Mulyani Calls Financial Companies Dominate Market Capitalization on the IDX

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati said financial companies such as banking, telecommunications, and e-commerce currently dominate the largest market capitalization on the Indonesia Stock Exchange (IDX).

"The best five of these companies have very close links with technology and the digital world," Sri Mulyani said as quoted by Antara, Monday, October 10.

Thus, he continued, the activities of these various companies would involve many sectors and resources.

Even so, Sri Mulyani assessed, the digital economy is not only synonymous with startups or e-commerce startups, but also includes various entities that were previously established with conventional ways of working and are now switching to digital.

Banking, for example, even though it has been providing internet-based services for a long time, currently the financial company still has to innovate in providing services through digital platforms.

According to Sri Mulyani, the digital economy is one of the factors driving Indonesia's economic growth.

The Coordinating Ministry for Economic Affairs noted that the economic value of the digital industry in Indonesia in 2021 could reach 70 billion US dollars.

"This figure will even be estimated to increase to reach 145 billion US dollars in 2025," she said.

Although digitalization presents opportunities and helps improve efficiency and quality, she does not deny that digitalization and technology also have the potential to pose great risks, distortion, and disruption.

She gave examples of risks related to the use of big data which requires adequate and strong protection of privacy, machine learning which can create overheating where computers pick up oddities in data that do not represent real-world patterns, and underheating where models are not complex enough to capture patterns that exist in data and reality.