To support fintech in Indonesia, OJK has renewed the regulation
In 2016, OJK (Indonesian Financial Service Authority) issued POJK Number 77/POJK.1/2016 concerning financial technology (fintech). The regulation focuses on peer-to-peer lending (P2P) systems. A peer-to-peer lending system is a form of financial services that aims to bring together loan applicants and lenders through an electronic system. So that no party feels aggrieved, the regulation becomes essential.
However, along with the development of technology, the financial technology industry is growing faster and more varied. Not only peer-to-peer lending, but there are also several fintech industries that have increased, such as payment applications and online credit. To protect consumers and also provide clear limits to business people, OJK has updated its financial technology regulations with POJK No. 13/POJK.02/2018. In addition to peer-to-peer lending, several things are emphasized in the new regulation. Here are the things are written in the regulation:
- The mechanism to register fintech
Every fintech product, whether from an institution or a start-up company, must be registered to the OJK to have clear legal standards. After going through the recording process, the fintech company will go through a regulatory sandbox process. This process lasts for approximately one year and includes business testing, services, and fintech products that have been recorded.
After completing the regulatory sandbox process, a fintech product will get a label from OJK. The labels are: recommended, not recommended, and also improvements. Then, the products that have been approved will be registered with OJK.
- Innovation, Education, and Formation of Ecosystems
In addition to updating the rules about fintech in Indonesia, OJK also created a hub known as Infinity. In infinity, business people, academics, state institutions, to the general public can find information related to fintech, get the education about the field, and can also discuss and get opportunities for cooperation.
This thing is also regulated in the 2018 regulation because OJK has a mission to form a friendly fintech ecosystem.Located in Wisma Mulia, Jakarta, Infinity OJK can be visited by the people who want more information about fintech.
- Data and consumer protection
Through these regulations, OJK is committed to protecting the data owned by business people, as well as consumers. All forms of technology are vulnerable to threats of hackers and fraud, so protection is necessary so that business people and the public feel safe. Besides, the transparency of the Fintech business is also emphasized to protect consumers and protect the country from losses.
- Risk Management
All business people who carry out digital financial innovations must carry out periodic monitoring processes to avoid their products from high risk, identify key risks, and also make risk self-assessment reports regularly every month.
- Anti-terrorism and money laundering
OJK stated that every organizer of digital financial innovation is not related to terrorism and money laundering at all, especially in the field of funding. Both are following OJK provisions regarding OJK Regulations in the Field of AML-CFT (Anti Money Laundering and Counter-Financing of Terrorism).
On the official website of OJK, you can see the complete attachment of the new Fintech regulations. For those of you who are business people of fintech in Indonesia, it is essential for you to clearly understand OJK regulations so that you do not violate the law and have no difficulty in registering your companies. Besides, consumers must also understand the regulation to avoid fraud happens to them.