Traditional cooperatives already have lot of members and they act as ‘owners’, the number of members varies and can even reach millions members. This is an interesting area to work on by fintech companies in Indonesia, and of course fintech company must transform the traditional cooperative into a digital cooperative unit first.
Internet penetration in Indonesia has reached more than 140 million users and most access the internet via smartphone. Fintech companies, like other mobile application providers, always face acquisition costs per customer and retention cost as well.
A cooperative has many members, unfortunately the average cooperative in Indonesia is still far from the digital range. By performing a digital transformation on a cooperative unit, it can then be continued by providing a fintech transaction function.
Many cooperative activities can be facilitated by digital technology. Starting from daily activities such as registration of new members, account opening, fund deposit, to annual activities such as announcements. The operational costs incurred for such activities are considerable. Digital transformation can provide great savings for traditional cooperatives.
Cooperative operations involve a lot of administrative and financial recording. This can be simplified and accelerated with digitization. Digitalization can be done by adding a web-based system that supports for integration through the API.
Once the back end is ready, your fintech company can create a front-end application to use by its members. The digital cooperative application can initially serve to check balances, check membership profiles, information, education and announcements such as shareholder meetings.
Although the cooperative has many members and can lower the cost of acquisition, but the fintech company will inevitably have to convert the traditional cooperative into a digital cooperative first. Of course, you can compare the cost of acquiring a fintech customer which is about USD 2 per customer with the number of cooperative members.
For large and national scale, you can cooperate with cooperatives that have hundreds of thousands to millions of members. Digital transformation should always provide favorable change for all parties.
Competition in the digital age is getting tighter. The fintech company should be able to think out of the box as it penetrates on an untapped field but has great potential.
Empowering a Digital Cooperative with Fintech
Traditional cooperatives have limits on the scope of transactions, such as not being able to transfer to a conventional bank.
After transforming into a digital cooperative, the fintech company can add functionality to the front-end application to expand the scope of the transaction.
Here’s the scope of deals that can be expanded with digital plus fintech cooperatives.
- Transfer to a conventional bank
- Scheduled transfers, such as payroll
- Online and offline payment transactions
- Remittance service
- Billing payments
- Balance purchases on other fintech applications, such as to fill GoPay balances.
Fintech Business Potentially More Growing Together with Cooperative Units
Fintech’s function expansion in digital cooperatives can continue to evolve, such as by providing monthly shopping facilities in its application, or for installments.
One important thing to keep us in mind for a successful digital transformation is that, in addition to savings for operations, the company should also be able to offer savings to users.
Once all is installed, then the fintech company can develop by providing a cooperative marketplace portal or e-commerce.
For example, for monthly shopping and so forth. With the income of the cooperative members who go into the fintech balance of the digital cooperative, surely you just need to direct them to do monthly shopping online.
Innovation and development can keep continue, for example by providing peer to peer lending modules for installment purchase of goods, either between members and cooperatives, as well as members with members. Installments purchase is a main business of traditional cooperatives in Indonesia today, and generally, cooperative’s members are very active. The velocity of money goes on in the co-op!
Elitery Support for Fintech and Cooperative Companies
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