Financial technology, or FinTech, is revolutionizing the way we interact with financial services by merging technology with finance. This dynamic field can be understood in two major ways. First, traditional financial enterprises are transforming by adopting new technologies. Take, for example, the advancements in mobile banking applications. These innovations allow customers to conduct transactions and manage their finances seamlessly on the go. Additionally, traditional banks are now leveraging artificial intelligence to enhance customer service and streamline operations, offering a glimpse into the future of banking. The second dimension of FinTech involves tech enterprises using their expertise to develop new financial services. For instance, Apple has introduced Apple Pay, a digital wallet that enables users to make payments using their Apple devices. In Indonesia, GoPay, provided by Gojek, allows users to pay for a wide range of services and products seamlessly. These examples illustrate how tech companies are driving innovation in the financial sector.

The rise of blockchain technology has significantly impacted the FinTech industry. Blockchain offers a decentralized system where users can update the network without relying on traditional financial institutions. This technology allows information to be stored and shared directly on a digital ledger, making it accessible to all network users. The security and transparency provided by blockchain have made it popular in both the private and public sectors. In Switzerland, the city of Zug has conducted a trial of blockchain-based voting, allowing voters to cast their ballots via a blockchain app on their smartphones. In Thailand, the Excise Department has partnered with Krungthai Bank to use distributed ledger technology for tax refunds to oil exporters and to prevent value-added tax (VAT) fraud. These examples highlight how blockchain can streamline processes and enhance transparency.

Despite the innovative solutions blockchain offers, several challenges must be addressed by the public sector when integrating this technology into government institutions. Arfah Habib Saragih suggests four approaches for enhancing VAT systems with electronic technology. Firstly, governments should develop regulations and legal frameworks to support blockchain implementation. Secondly, comprehensive databases and infrastructure need to be established to serve as the backbone of electronic tax systems. Thirdly, technical equipment capable of utilizing blockchain must be developed. Lastly, database software should be designed and improved to help tax authorities efficiently fulfill their duties. Saragih's study also reveals that blockchain technology can be used for VAT data distribution through the Tax Invoice Serial Number (TISN) system. Implementing a blockchain-based TISN system can speed up and enhance the efficiency of submitting TISNs from the Directorate General of Taxation (DGT) to Taxable Enterprises (TE). Additionally, the DGT can directly monitor and track transactions within the TISN. A permissioned private blockchain is suitable for this system, allowing the DGT to control who participates as nodes and what level of authority they have within the network.

As blockchain continues to evolve, its potential to transform both the private and public sectors becomes increasingly apparent. By addressing the challenges and leveraging the benefits, blockchain technology can pave the way for a more efficient, transparent, and secure financial future.