This article investigates the promise of Insurtech to expand the frontier of the insurance market to include vulnerable populations around the world. It contributes to current debates on the proliferation of new technologies for financial inclusion as embedded in contemporary forms of platform-based capitalism. We argue that Insurtech’s promises fall short of expectations because of the contradiction between the principles of platform scalability and insurance risk pooling. Such contradictions lead Insurtech platforms to unpool risk rather than provide innovative technologies to pool it. This ultimately limits the expansion of markets for inclusive insurance as Insurtech platforms struggle to scale up the market through their supposedly disruptive technology. Our analysis draws on a range of regulatory reports, complemented by in-depth interviews with Insurtech executive officers. The article offers insights into the contradictory principles currently driving the digital inclusive insurance market, as well as the limits to the ongoing global expansion of platform capitalism.

Indonesia has the largest financial technology (FinTech) industry in Southeast Asia: 167 FinTech companies offer payment, lending, personal finance, crypto and blockchain, crowdfunding, Insurtech and point-of-sale (POS) services. Two entities regulate the FinTech industry: Bank Indonesia and Otoritas Jasa Keuangan (OJK). The Indonesian FinTech ecosystem encompasses savings and investments, money transfer and payments, POS, lending and borrowing, accounting, comparison, financial planning, crowdfunding and cryptocurrency. Money transfer and payments take up the highest percentage, currently at 50%, in all FinTech ecosystems with the most digitally active customers. Peer-to-peer lending dominates the Indonesian market. The FinTech subsectors offer financial management, crowdfunding and insurance services. The abuse of this technology in facilitating terrorist financing, the weaknesses of the laws and policies, and the need for reform and remedies are discussed.

Online supply-chain financing has been a relatively novel funding channel for suppliers as small- and medium-sized enterprises (“SMEs”) to obtain loans in that the revolution of financial technology (“FinTech”) transforms traditional supply-chain financing, which used to be administered only by official banks, to an online model also used by electronic commerce platforms (“e-commerce platform”). Endeavours towards financial inclusion of the underserved SMEs could rationalize why we should allow for or encourage FinTech innovations exemplified by the online supply-chain financing mentioned above. What would be an adaptive regulatory regime for such innovative FinTech-enabled financial services as the online supply-chain financing? Within our conceptual framework to regulate the FinTech industry at the early stage, rather than rigorous rules traditionally placed on large financial institutions, a principles-based strategy should be adopted to strike a balance between financial stability and access to financial services advanced by disruptive innovations. As a necessary complement, regulatory sandboxes would be needed to spur a shift in institutional philosophy to a principles-based regulatory regime. In other words, the regulatory attitude of FinTech regulation should be humble and light-touch to promote innovation for improving digital financial inclusion, albeit on the premise of containing potential systemic risk and protecting consumer interest in the meantime.