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Generational Differences in Using Digital Financial or Fintech Services

The financial world has witnessed many transformations largely triggered by rapid technological advancements. The intersection between finance and technology has given birth to a dynamic field that we commonly know as Financial Technology or Fintech. Fintech is changing the way individuals and businesses interact with their finances. In the first half of 2023, Jakpat conducted a survey of 1425 respondents in Indonesia regarding the use and habits of respondents in the financial and fintech landscape. The survey, which was later published in the form of a report entitled “Indonesia Fintech Trends 2023″, focuses on several digital financial services such as digital payments, online credit, and investment platforms. In addition, the survey also explored respondents’ financial behavior, insurance, and credit practices.

The Use of Digital Financial Services

In semester 1 of this year, there were 8 out of 10 respondents who used digital payment platforms to make transactions both offline and online. Some digital payment platforms used include e-wallets or digital wallets, mobile and internet banking including virtual debits, and delayed payments service namely Buy Now Pay Later (BNPL) or commonly called paylater. According to Aska Primardi, Head of Research Jakpat, awareness and the number of users of financial products in Indonesia continue to increase from year to year, with the most widely used platform being digital payment.

E-wallet is the most widely used service by respondents who claim to use digital payments for transactions. As many as 84% of respondents use e-wallets for various needs such as paying for groceries both offline and online, paying for entertainment needs, to paying monthly bills. Followed by the use of digital or mobile and internet banking with 52%, and paylater for 26%. The use of digital payments is indeed more common among young people, namely Millennials and Gen Z, especially for e-wallets. While digital banks are used by more than half of Millennials and Gen X. Millennials are also the segment most exposed to the use of paylater. Among Millennials who usually use digital payment methods, there are 32% who admit to using paylater services. The most common transactions paid using paylater are online shopping (23%) and paying for food with online delivery orders (18%).

Investment and Insurance

In addition to reviewing the use of various digital payment services, the report also displays data on the use of other financial products such as investment, insurance, and credit. Of all respondents, there are 38% who pay credit installments every month and 24% of respondents pay insurance premiums. While users of investment products are at 25%.

“Users of investment products are at 25%, but after digging deeper, it turns out that not all investment users are users of insurance products. It can be seen that the proportion of Gen Z in the user investment platform segment is 32%, while the proportion of Gen Z in the insurance user segment is 19%. In contrast to Gen X, this segment sees more insurance than investment platforms,” Aska explained.

“If we look at the financial pyramid, then the thing that must first be met is a safety net (for example meeting basic needs, emergency funds, insurance), then followed by investment to accumulate and preserve wealth. This is what Gen Z forgets, where they prefer direct investment to achieve financial freedom, without considering financial “security” first. A common reason why Gen Z is more willing to take risks is because they are currently single and unmarried,” Aska added.

How exactly does Gen Z view the concept of financial management? Do Millennials share the same view?

Get the details in our report here.

Header-[Premium Report] Fintech 1st Sem 2023_V5

Indonesia Fintech Trends – 1st Semester of 2023

As digital platforms continue to disrupt traditional financial services, they redefine the way individuals and businesses interact with their finances, especially through fintech. Fintech becomes the intersection between financial and technology. Several fintech platforms that are readily available including digital banking, digital wallet, investment, as well as online credit or lending. In this report, Jakpat will share our research findings related to the usage of various fintech services. These results are based on a survey conducted monthly in the first semester of 2023.

Key research points:

  • How society perceives financial planning
  • The usage of several financial technology platform
  • Popular fintech platforms and insurance providers used
  • Various insurance products

Here are some previews of the report:

Fintech Trends 1 Fintech Trends 2 Fintech Trends 3

Complete Report Can Be Downloaded Below

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or Email Us at partner@jakpat.net

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Financial Product Survey: Paylater as The Most Desirable

Each generation has different consumption behavior when it comes to finance. This is due to various factors such as exposure, usage, and attitude to available financial products.

Jakpat conducted a survey to find out the perspectives of Generation X, Generation Y (Millennials), and Generation Z in Indonesia related to finance. The report, which involved 602 respondents, shows what types of financial products are used, sources of income, and personas for each generation.

The survey results stated that all generations have savings with a percentage of more than 90% for each. The second most widely used financial product is paylater. Meanwhile, the younger generation (Gen Z) claims to have tried investment products such as stocks (27%).

Paylater is one of the most popular financial products for every generation. However, it could be that each generation has different consideration factors before deciding to use paylater, “said Head of Research Jakpat, Aska Primardi.

He highlighted the number of paylater users in Gen X (38%) which is more than Gen Z (34%). But at the same time, the number of insurance, mortgage, and credit card users is also more than Millennials and Gen Z.

“It could be that Gen X chooses paylater as a short-term financial solution in order to meet their needs, considering that at the same time they also have to allocate budget for other financial products,” said Aska.

Meanwhile, the highest number of paylater users is Millennials (44%). “At the same time they also have loans, mortgages, credit cards, and stocks. In addition, they also have dependents, the family, which must be paid for. Paylater can be a solution for all these needs,” said Aska.


Sources of income

All generations rely on salary as their main source of income, followed by non-formal income such as being a freelancer or owning another business. Gen Z, as predicted, still depends on parental income. As many as 45% of them admitted to making remittances from parents as a source of income. This affects the financial products used by this young generation.

“Gen Z uses paylater and at the same time also invests in stocks. Given that the majority of Gen Z’s income is still not optimal, because one of them comes from parents/family, to optimize the amount of stock investment each month, they will buy some of the necessities through the paylater feature. So that their hope to achieve financial freedom in the future can be achieved, and the most important thing now is that they can still fulfill the needs of life and lifestyle,” explained Aska.

One in four respondents claimed to have double income. Although not significant, Millennials are the generation that has the most dual income with a percentage of almost 30%. Then, 22% of respondents admitted that they only had income in terms of non-formal. One out of three Generation Xers does this.

All generations allocate half of their income to daily needs. Then, as much as 27% of income  is saved as savings.


3 Financial personas 

Jakpat divides financial personas into three types. First, Backwards tend to have little savings and rely on loans. As many as 11% of respondents fall into this category.

Then, the Stable  category where Generation X dominates with a percentage of almost 38%. These personas tend to ‘play it safe’ where they have savings but little investment. Lastly, Fordward-looking tend to be risk savvy where they have savings and investments. This group is dominated by Gen Z (30%).


Get the details on our report here.