Policies and Innovations of Financial Technology Business Models in the Digital Economy Era on the E-Business Ecosystem in Indonesia

Introduction

Information and Communication Technology is essential in business processes, goods, and services to achieve a competitive advantage. Information and Communication Technology changes the way people work (the way people work) while also changing how companies compete (the way businesses compete). Information and Communication Technology Support develops new courses of transacting (e-commerce). The development of the e-commerce function encourages the emergence of e-business. E-business is the practice of managing critical business processes such as product design, management of raw material supply, sales, and service provision through information/communication technology and computerized data (Alter, 2002). In other words, e-business can be defined as the use of Information and Communication Technology in supporting all business activities.

E-Business is becoming more and more popular, and policymakers understand that Information Technology cannot act alone. Several vital aspects must be conditioned, such as Business Strategy, Planning, Organizing, Finance, Law, and Risk Management. These aspects that need to be drilled are crucial so that E-Business can develop positively. There are several critical views on E-Business as outlined by Martin V. Deisie and friends; one of these views states that E-Business is a must. Technology will continue to change, and e-business will continue to appear and exist more in the future in various fields. E-business will become the standard of operation limited to Financial Services, printing, and retail. The executives' vision will be the critical point for the successful implementation of E-Business.

The rapid development of E-Business has become a new phenomenon in the digital economy in Indonesia. This fact is expected to have a more positive impact on the prosperity of the digital economy in Indonesia. This is related to the condition of the vast country of Indonesia, consisting of 16 thousand islands with a population of around 240 million people, which is a challenge for the Government to carry out equitable economic development in all fields. E-business is electronic trading activity in a broad sense. One part of the activity of E-Business that is currently very hot is E-Commerce, which includes trading via the internet (internet commerce), trading with internet web facilities (web-commerce), and trading with structured data exchange systems electronically (electronically). Meanwhile, Kulhmann et al. (2018) suggest four main areas to support the development of an enabling environment for inclusive digital economy policies: consumer protection, data confidentiality, cybersecurity, and electronic payments.

The Indonesian Central Statistics Agency stated that currently, the digital economy's contribution in Indonesia has only reached 5% of the Gross Domestic Product (GDP) (CBS, 2018). However, the growth prospects are pretty bright if you look at the value of online shopping transactions (e-commerce), which reached US$130 billion in 2020. With a large population and total smartphone device, connections exceed 371 million units. In the future, Indonesia will become a digital ecosystem with the largest market in Southeast Asia. The development of this digital ecosystem cannot be separated from several driving aspects, such as infrastructure development (both hardware and software), the large number of social media users, the massive use of data, and the ease of obtaining a connected device to the internet. Nevertheless, the country's information communication and technology (ICT) infrastructure is still a chore in equity. Currently, the user center and digital infrastructure development are still centered on the island of Java.

Meanwhile, the number of internet users in rural areas is difficult to increase due to limited infrastructure (MASTEL, APJII, ATSI, 2017). The data also shows that domestic ICT companies continue to experience growth (BEKRAF, 2019). For example, on-demand transportation services initiated by GO-JEK and Grab.