Rudiantara Calls The Closing Of SVB An Early Warning To The Indonesian Fintech Sector

Chairman of the Steering Committee Ifsoc Rudiantara. (Photo: Doc. Antara)

JAKARTA - The Indonesia Fintech Society (Ifsoc) assesses that the closure of Silicon Valley Bank (SVB) which occurred in the middle of the current tech winter needs to be seen as a signal and early warning so that the Indonesian fintech sector immediately strengthens corporate governance and risk management.

Chairman of the Steering Committee Ifsoc Rudiantara emphasized that the digital financial sector in Indonesia must remain vigilant and continue to monitor the development of cases that occur.

"We hope that the condition of the digital financial sector can be more stable in the midst of the tech winter which is still rolling," he said in a statement in Jakarta, quoted from Antara, Thursday, March 16.

The former Minister of Communication and Information also positively welcomed the statement by the Financial Services Authority (OJK) regarding the closure of the SVB. The OJK statement is a relief in the midst of so much speculation that has emerged in line with the collapse of SVB, especially in the fintech sector.

Rudiantara assessed that various speculations on various social media channels developed very quickly after the closure of SVB by the financial sector authorities in the United States on March 10. According to him, in the financial sector including fintech, speculation that has developed wildly has the potential to trigger public panic.

"Therefore, we appreciate the OJK for quickly issuing statements that calm the public regarding this issue. This will help provide certainty of information, and put the brakes on the development of various speculations that have the potential to disrupt the conduciveness of the financial and fintech sectors in Indonesia," added the man who is often called Chief RA.

Meanwhile, Steering Committee Ifsoc Dyah Makhijani said that the collapse of the SVB needs to be observed carefully so that it becomes a lesson in strengthening and developing the digital financial sector in the future.

"Mitigation efforts in the form of strengthening governance and implementing better risk management are the keys in realizing the continuity of the digital financial sector. Good corporate governance is absolutely implemented to maintain public trust, which is currently very enthusiastic about the development of our digital financial sector," said the former Assistant Governor of BI.

Meanwhile, the Ifsoc Steering Committee, which is also a former OJK Commissioner, Tirta Segara, believes that the increase in interest rates in developed countries due to high inflation has directly affected the ability of startup companies, including fintech, in obtaining low-cost funding.

This phenomenon, coupled with the decreasing value of bank liquid assets, is allegedly related to the fall of SVB.

Based on Ifsoc observations, during 2022 the value of fintech startup funding has indeed increased, but with the number of declining funding recipients.

"Fintech startups have entered a new chapter. Currently, Investors are more selective in providing funding by focusing more on profitability than growth," he added.

This condition, according to Tirta, needs to be responded to by building an ecosystem and fintech business model that also focuses more on bottom lines than on volume and growth just like in previous times. This will encourage the fintech startup climate to be healthier and more resilient.

"As we have previously conveyed in the end of 2022 in December last year, adjustments to a commercially virable (commercially viable) business model are needed. This will play a role in establishing a strong and sustainable digital financial ecosystem," Tirta concluded.