Indonesia Central Bank to Prepare Fintech Regulatory Roadmap
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Bank Indonesia is currently preparing a roadmap of regulations for financial technology, or fintech, products in an effort to support the rapid change of the global financial system in the digital era, the central bank’s official said on Thursday (08/02).
“This is a response to the shift from physical to virtual as it presents risks and challenges […] There will be a roadmap to regulate fintech to follow its dynamic development,” Sukarelawati Permana, director of the policy and payment department at the central bank, said at an economic forum.
The central bank is collaborating with Financial Services Authority, or OJK, to create the regulatory roadmap.
Sukarelawati, however, did not reveal the details of the framework or when it will be released.
The regulations, according to her, will mitigate risks presented by the sector’s development, while still supporting the shift of traditional payment systems into the digital realm.
“As we surely cannot block innovation, we as the authorities will try to balance the digital economy,” Sukarelawati said.
The central bank previously issued a provision to support innovation in the fintech sector that benefits the economy while maintaining the principles of consumer protection, risk management and prudence, Sukarelawati said.
A 2017 Bank Indonesia regulation regarding financial technology implementation dictates that fintech providers register with the central bank.
The regulation excludes payment system service providers (PJSP) who have obtained a license from Bank Indonesia and providers who are under other authorities. But the providers must still inform the central bank regarding new products, services, technologies and business models.
Bank Indonesia is currently also conducting a study on the feasibility of issuing digital currency.
Questions & Answers
Q.What is the primary goal of Bank Indonesia's new regulatory roadmap for fintech?
What is the primary goal of Bank Indonesia's new regulatory roadmap for fintech?
The central bank aims to manage the risks and challenges presented by the shift from physical to virtual financial systems. This roadmap will support the dynamic development of fintech while mitigating associated risks.
Q.What balance does the central bank hope to strike with these new regulations?
What balance does the central bank hope to strike with these new regulations?
The authorities plan to balance supporting the digital economy and innovation with mitigating risks. They aim to safeguard consumer protection, risk management, and prudence while enabling fintech growth.
Q.Does Bank Indonesia already have any regulations concerning fintech providers?
Does Bank Indonesia already have any regulations concerning fintech providers?
Yes, a 2017 Bank Indonesia regulation requires fintech providers to register with the central bank. However, payment system service providers with an existing license and those under other authorities are excluded from this specific rule.
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