1. Rapid digitization provides a suitable customer funnel for online services, including WealthTech

Improving internet access is expected to drive more users towards online services, including WealthTech platforms. Due to a shared focus on a digital user base, WealthTech players are also open to partnerships with other digital service providers. We estimate >2x increase in WealthTech user base during 2020-25.

WealthTech User Evolution – CY 20-25F, Number of Users, Mn

Note(s): (A) Users include MF and Equity buyers on WealthTech platforms who buy at least once a year.

2. Both retail and institutional AUM has grown over time

Indonesia’s total AUM (ex property) has grown at double-digit levels during 2016-21. The investor base has increased by 1.7 times during this period. We expect the growth trends to persist, driven by 1) sustained economic improvements, 2) increasing share of UHNVIW, and 3) higher digital penetration. Hence, the share of the working population investing in stock markets (< 3% in late 2021) and other assets classes is likely to improve going forward.

Note(s): Investment Market Size Excluding Property Assets

3. Around half of retail investors invest 5-20% of their income. Mutual Funds and Crypto currencies are the most preferred asset classes

The majority of Indonesian only use a small share of their incomes for investments. Within this males invest a higher share of their income versus females. Further, higher-income groups invest a relatively higher share of their income. Mutual funds and cryptocurrencies were the most preferred asset classes towards end 2021.

Note – Late 2021 findings

4. Most retail investors are self-motivated to invest. Investments are seen as a source of additional income over the long-term

Covid -19 induced mobility restrictions forced many people to spend time at their homes. This phase allowed them to review their saving and investment plans. Expectedly, investors are hoping to generate additional income from such investments. In addition, the investors are taking a long-term view of these investments.

Note – Late 2021 findings

5. The market started with the entry of crypto players and has evolved over time. Investors’ have been active in the recent times

In view of the strong growth potential in WealthTech, there has been a noticeable increase in investor interest in this sector. Given the structural opportunity, the sector is likely to sustain long term interest, in our view.