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.