The next five years of DPI in Indonesia will reshape lives: IFIS 2025 panel

Indonesia is Southeast Asia’s biggest country geographically, economically and by population. It is a developing country but it is experiencing significant economic growth.

As a huge, sprawling archipelago it faces unique geographical and logistical challenges, which makes Indonesia’s major investments in digital public infrastructure (DPI) a fascinating journey.

Jakarta recently hosted the Indonesia International Financial Inclusion Summit (IFIS) 2025, which focuses on financial inclusion, organized by the Tony Blair Institute and the Gates Foundation in collaboration with Indonesia’s Coordinating Ministry for Economic Affairs, Bank Indonesia, and Financial Service Authority (OJK).

Speaking there, the Indonesian Ministry of Home Affairs’ Director General of Population and Civil Registration (Dukcapil), Teguh Setyabudi, remarked that digitalization and DPI were necessities, rather than options, to ensure services are accessible to the 282 million people in Indonesia.

Dukcapil has established the foundations of a digital ID system through digitally verifiable population data, which, Setyabudi said, can be used to improve services.

“In addition to making it easier for people to get basic government services such as education and health services, the digital ID system has also increased the number of people opening bank accounts, financial services, and digital wallets,” he said, as reported by Gov Insider.

The next five years of DPI development in Indonesia 

Dukcapil’s Director-General stressed that inter-agency collaboration is key to the successful implementation of DPI nationwide, including working with the private sector and civil society, after the panel was prompted to consider near future developments in DPI.

Alongside Setyabudi on the panel was the Ministry of Administrative and Bureaucratic Reform (PANRB)’s Deputy of Government Digital Transformation, Cahyono Tri Birowo.

Birowo said the government is preparing a new Presidential Regulation (Perpres) that would mark a major shift to a collaborative ecosystem to strengthen services. The policy would drive changes in work culture, data management and the use of technology.

Birowo’s ministry is currently developing lifecycle-based services, which aims to meet the needs of citizens from birth, school, work, marriage, to retirement and death. The backbone to this would be digital ID so that one validated ID can be accessed across sectors.

Bank Indonesia’s Director of Payment System Policy, Fitria Triswati, spoke on the panel on an omni-channel and interconnected approach in the payment system. The goal was to make all payment services faster, more reliable, safer, cheaper and easier so that Indonesians can access financial services and social assistance via any channel or application, even if not owned by the ministry.

Bank Indonesia has developed the Indonesian Payment System Blueprint (BSPI) 2030, Triswati said. BSPI 2030 focuses on creating a digital Government-to-Person (G2P) social assistance distribution channel that is more targeted and reduces leakage. Triswati said it is being developed together with “industry and related ministries.”

Fintech company DANA Indonesia’s CEO and co-founder, Vincent Iswara, said that by leveraging KYC verification services from Dukcapil, DANA Indonesia’s digital wallet has been accessed by 180 million users in less than seven years.

Creating inclusive DPI for all Indonesians

World Bank senior digital development specialist Jonathan Marskell expressed admiration for Indonesia as it builds one of Asia’s largest DPI ecosystems.

Observing Indonesia’s huge cultural, geographical and logistical diversity, Marskell noted that the principle of inclusion will require solutions to be customized to the local context.

“In Indonesia, not everyone has email, so design an application that can work with WhatsApp or SMS,” he said.

Alongside the principle of inclusion, Marskell said trust and perceived value are the three key principles in building an inclusive and effective DPI.

If fraud and cybercrime are left unchecked, citizens will not trust and will not use digital services. Marskell praised the PDP Law as a good first step towards transparency and privacy protection, which are crucial to trust.

Citizens should feel tangible benefits from DPI, like integration with private sector services such as e-commerce and financial services. This creates perceived value. The World Bank is currently supporting the Ministry of Finance and Bank Indonesia on elements of the digital payment system, as well as collaborating with Dukcapil on the development of digital ID.

Digital government will streamline state spending

Indonesia’s National Economic Council Vice Chairman, Muhamad Chatib Basri, has stated that one of the most difficult aspects of managing the economy is the inaccuracy in allocating government budgets. This is especially acute in subsidy delivery.

“Many of our findings show that our subsidies are not well targeted,” said Basri during a keynote speech at the AWS Public Sector Leadership Innovation Exchange event in Jakarta, as reported by Gov Insider.

Basri brought up the example of fuel subsidies where almost 30 percent are misdirected, according to the Vice Chairman.

Government digitalization will improve the accuracy of budget allocation, Basri believes, such as by ensuring people’s eligibility before they can receive state assistance. This will help ensure the subsidies are better targeted.

“Digital identity verification and digital payment will open a pathway for the government to deliver its services more efficiently and on target,” said Basri.

According to DEN data, Indonesia spends $29.9 billion (IDR504 trillion) on subsidies, which includes energy subsidies and social protection programmes — such as fuel and electricity, and food assistance and education funds, respectively — but of that budget around 20 percent ($5.9-7.5 billion) is not targeted.

Bank Indonesia is developing a Payment ID system that uses a unique code contained in bank accounts, such as ID card number, to allow the government to authenticate cash transfer beneficiaries.

The government should encourage Indonesians to activate the Identitas Kependudukan Digital (IKD) app through their smartphone and create a bank account to facilitate the disbursement of subsidies, Basri said.

The Vice Chairman observed that a significant bureaucratic challenge was convincing ministries and agencies to hand over their authority and cooperate, with many reluctant to do so despite regulations mandating it. This hesitation was worsened following the ransomware attack on the National Data Centre (PDN) last year.

Basri said the government is creating a GovTech Committee to make sure its digitalization initiatives go according to plan.

Article Topics

DANA Indonesia  |  digital government  |  digital ID  |  digital public infrastructure  |  Dukcapil  |  Gates Foundation  |  Identitas Kependudukan Digital (IKD)  |  Indonesia  |  Tony Blair Institute