Sneak Peek into Indonesia’s Fintech Regulation

Indonesia’s banking sector much like other parts of Asia is ripe for disruption from Fintech. While the banking sector has always been the cornerstone of economies, being the monolithic entities that they are, there are many gaps that can prove to be difficult to fulfil.

Regulators from around the world and Asia are very aware of that reality and Indonesia as a rapidly developing nation of opportunities is not blind to that fact. Having just finished BankTech Asia Jakarta this week, we had the pleasure of having Mr Dumoly F. Pardede who is the Deputy Commissioner of Supervision of OJK (Financial Services Authority) and Mr Tuahta A Saragih who is the Deputy Director of Enforcement, Financial Supervision Directorate to share an outline of what the Fintech regulation of Indonesia will look like at BankTech Asia Jakarta.

One of the key areas highlighted by OJK was the fact that financial distribution amongst the SME’s were severely lacking and the reality is that the banks alone are unable to solve this issue. Mr Tuahta was quoted saying that out of the 60 million Micro SME’s only 11 million of them have loan accounts in banks and they are largely concentrated within the Java Island.

financing distribution


MSME’s and SME’s are the backbone of economies and access to finance facilities is the lifeblood of these entities, the lack of distribution to them is not in line with Indonesia’s national program. He then added that this is where Fintech can really contribute to the nation.

With that in mind amongst various other factors was the reason why OJK came out with the guideline.

Dumoly quote

Mr Dumoly emphasized that while it is important to manage risks, it is also equally important to not stifle Fintech at its infancy. From what we gather during the speech, this is why the approach is being taken.

Mr Tuahta then shared  on the outline of how Fintech will be classified and the regulations that they will fall under, which provides some clarity on how Fintech companies can operate within Indonesia


It is also interesting to note that in a separate panel on Financial Inclusion Mr Pungky Wibowo who is the Head Group Development of Retail Payment System and Financial Inclusion also shared similar views that Fintech solutions can play a big role in financial inclusion, however as a regulator, he opined that they must still be on their toes to counter money laundering and terrorism financing.

Pungky Quote

All in all, our take is that, it is certainly very heartening to see the regulators encouraging the development of fintech in Indonesia. Emphasizing the regulator’s commitment in growing Fintech, both Mr Dumoly F. Pardede and Mr Tuahta A. Saragih is actively involved in organizing the Indonesia Fintech Festival, in which the guideline will formally be announced. We encourage anyone who is in Indonesia during that time to take part in this wonderful initiative from the Indonesian government.


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

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