How the rise of AI in Indonesia is expanding financial inclusion

Indonesia is at a pivotal moment in its digital transformation. With over 280 million people spread across 17,504 islands and over 180 million smartphones, connectivity has never been higher.

Internet penetration approached 79% in 2024, reflecting the nation’s swift embrace of online platforms. Only a decade ago, nearly half of Indonesia’s adult population remained unbanked. Thanks to rapid advancements in financial technology, the financial inclusion index has climbed to almost 84%. Had AI been as pervasive 10 years ago, this transformation could have been even faster.

Though digital adoption is a global trend, Indonesia’s trajectory is distinct, shaped by supportive government policies, a vibrant fintech sector and a surging digital economy.

Over the past decade, these factors have converged to accelerate financial inclusion – from 49% in 2014 to around 83% in 2023. This remarkable leap is equivalent to adding the population of Switzerland seven times to Indonesia’s banking system.

Moreover, the adoption of digital technologies also correlates with the anticipated growth in gross merchandise value in Indonesia, which is projected to reach approximately $200-360 billion by 2030.

These milestones support Indonesia’s long-term ambition, Indonesia Vision 2045, which envisions an advanced, inclusive and sustainable economy.

Artificial intelligence (AI) – increasingly embedded in financial services to enhance fraud detection, streamline risk assessments and offer personalized customer experiences – is one of the most promising drivers of this progress. By harnessing AI effectively, Indonesia stands to extend essential services to underserved communities, strengthening the foundation of its digital economy.

However, the rapid rise of AI also highlights the importance of a balanced regulatory environment that nurtures innovation while protecting consumers. AI depends on vast amounts of data, raising concerns about privacy, cybersecurity and potential biases in algorithmic decision-making.

In finance especially, where trust and transparency are paramount, small lapses can undermine progress. Questions of accountability also surface: AI’s complexity can obscure how decisions – such as loan approvals or investment recommendations – are made.

Without transparent mechanisms, users risk being misled by misinformation or flawed analytics and underserved groups might remain excluded.

At DANA, we have been upskilling employees and integrating AI into our applications, feeding into our mission of building a more inclusive, cashless society.

Last year, we launched “AI Everywhere”, an initiative to weave AI seamlessly across our operations and culture. Engineers make up 60% of DANA’s workforce today, tackling challenges from scam detection and risk management to improving customer service through virtual assistants and personalized financial tools.

By refining and deploying AI solutions in these areas, we aim to protect user data, mitigate fraud and tailor products to individual needs – boosting trust and fostering widespread adoption.

Yet, realizing the full potential of AI requires more than internal focus. Collaboration among fintech pioneers, policy-makers, technology providers and regulators is vital. Indonesia has laid promising groundwork through programmes such as the Indonesia Payment System Blueprint 2025–2030, driven by the Central Bank.

This framework seeks to create secure, interoperable digital financial systems that responsibly embrace AI innovations. At the national level, the government’s AI code of conduct, introduced in 2023 by the Ministry of Digital and Communications, underscores the urgency to address ethical questions and align industry practices with societal values.

In parallel, Indonesia is bolstering personal data protection through regulations to safeguard citizens in an increasingly data-driven era. These steps are not only regulatory obligations but foundational pillars for building public trust.

As AI gathers and processes large volumes of sensitive information, rigorous data management becomes critical to preventing cybersecurity breaches and reinforcing confidence in AI-driven services.

Indonesia’s leadership in South-East Asia’s fintech expansion offers an opportunity to shape regional conversations. Forums such as the Association of Southeast Asian Nations discussions on the Digital Economy Framework Agreement provide a platform to champion ethical AI adoption and share best practices in payment innovation and financial inclusion.

By bringing Indonesia’s experiences to these forums, we can help guide policy considerations across diverse cultural and economic contexts, demonstrating that AI-led growth can be rapid and equitable.

Nonetheless, challenges persist. Many developing nations grapple with the complexities of AI governance – balancing innovation with consumer protection, tackling data sovereignty and crafting adaptive regulatory frameworks.

Indonesia’s cultural diversity, extensive geographic spread and varied income levels mirror common hurdles emerging markets face. By leading with a collaborative, transparent approach, Indonesia can offer a blueprint for harmonizing growth with accountability.

Ensuring good governance and sustainability in AI adoption requires a broad coalition of government agencies, business leaders, investors, civil society organizations and consumers. It involves ongoing policy reviews, frequent stakeholder engagement and a willingness to adjust strategies as AI evolves.

If managed well, AI promises to narrow the gaps that persist in our large archipelago – extending fairer financial services, promoting opportunity and fueling inclusive economic progress.

At DANA, our commitment is twofold. First, we need to innovate with AI in ways that directly serve the financial needs of everyday Indonesians. Second, to join other stakeholders in shaping responsible practices that elevate the quality of life for all.

As technology advances, our guiding principle remains clear: AI should strengthen human well-being rather than overshadow it. This ethos aligns with the spirit of the World Economic Forum Annual Meeting 2025’s theme, “Collaboration for the Intelligent Age,” emphasizing the shared accountability we all hold in ensuring AI’s benefits reach the many, not just the few.

Indonesia’s journey illustrates how technology can be harnessed for inclusive growth. By championing responsible AI, balancing innovation with robust safeguards and nurturing multi-stakeholder collaboration, we can build a digital future that uplifts everyone.

Let us forge a path where fintech and AI are catalysts for progress, standing as global examples of what can be achieved when human-centred technology meets visionary leadership.