Jakarta. Indonesia's Financial Services Authority, the OJK, has formed a team to study and collect data as a first step in preparing a regulatory framework for the country's financial technology industry, hoping to spur growth in a sector that could prove to be the backbone of the government's financial inclusion program.
"The OJK will watch closely how the fintech phenomenon develops in the country, [...] support it and ensure that customers are protected," Rahmat Waluyanto, OJK deputy chairman, said on Thursday (06/10).
The OJK has already regulated branchless banking as a way to promote financial inclusion. The regulation also covers financial transactions on the internet, but does not say anything about new forms of online financial services such as peer-to-peer lending and crowdfunding.
Rahmat said the new OJK regulation — which will cover capital requirement, business model, consumer protection and minimum risk management — will be ready by the end of this year.
It will, however, only apply to banks, insurance companies, investment companies, financing companies, peer-to-peer lending and crowdfunding. Fintech businesses that focus on payment will be regulated by the central bank.
According to Rahmat, the OJK will soon set up an ecosystem called Fintech Innovation Hub where local fintech businesses can connect and collaborate on a regulatory sandbox.
A designated team will use the fintech regulatory sandbox to test upcoming policies, ensuring customer protection and sustainable growth for fintech businesses.
The OJK will also set up a certification authority in financial services — a digital certificate issuer — as part of an earlier cooperation agreement with the ICT Ministry.
"Fintech development makes financial institutions more approachable as it isn't too affected by the lack of infrastructure," Patrick Walujo, Indonesian Chambers of Commerce and Industry (Kadin) head of startup technology, said at a fintech event earlier.
Currently, Indonesia's financial inclusive index is at 36 percent, lower compared to Thailand (78 percent) and Malaysia (81 percent).