Deputy Chairman of the OJK Board of Commissioners Nurhaida remarked that if digital financial innovations could be accommodated and stood on a strong legal basis, then they can develop well.
"The aim of developing digital financial innovations is to advance the economy of our people, as they can reach a wider section of society," Nurhaida noted here on Tuesday.
The OJK has issued Regulation (POJK) No. 13/POJK.02/2018 on Digital Financial Innovation in the Financial Services Sector in September 2018. The regulation is aimed at supervising and managing financial technology industries (fintech).
The regulation was issued by the OJK following rapid technological advances in fintech that need to be managed, so they can provide maximum benefits to the people.
Digital financial innovation needs to be directed to generate innovations that are responsible and safe, prioritize consumer protection, and have well-managed risks.
This regulation was also issued to support innovative, fast, cheap, and easy financial services and to increase financial inclusion, investment, and other financial services.
Nurhaida added that the OJK seeks to cover all activities in the financial services sector, with rules, so that in case of a violation, a clear sanction can be imposed.
"In future, fintech will always develop. We monitor every cluster whether it already has rules. If not, then the OJK will make a rule for the new cluster," Nurhaida noted.
The OJK has, so far, received registration documents from 21 startups engaged in the fintech sector in the online purchase and sale of gold, aggregator, financial planner, crowdfunding, credit scoring, online verification, and other insurance claims.
The mechanism for recording and registering fintech as stipulated in POJK 13 mentions that every digital financial innovation provider, both startups and Financial Service Institutions, should go through three stages before submitting a licensing application.
The first stage is to register the organization in the OJK that automatically includes a request for a regulatory sandbox.
For Financial Service Institutions, an application for sandbox is submitted to supervisors in each field: Banking, Capital Market, and Non-Bank Financial Industry.
The second stage is the Regulatory Sandbox process, with a maximum period of a year and can be extended for six months if needed.
The third stage is the submission of registration/licensing to the OJK.
Meanwhile, the OJK will conduct monitoring and supervision of fintech. The OJK will determine digital financial industry providers that have met the requirements to follow the regulatory sandbox process. The regulatory sandbox results will be set to "recommended", "repaired", and "not recommended" statuses.
The digital financial industry that has undergone a regulatory sandbox process and has a recommended status is allowed to submit an application for registration to the OJK.
The digital financial industry is required to conduct independent supervision by preparing a self-assessment report that contains at least aspects of governance and risk mitigation.
The digital financial industry is prohibited from including the name and/or OJK`s logo, but the company is allowed to put the registered sign number on its document.
In the medium term, the OJK can appoint other parties, such as the Association of Digital Financial Industries, recognized by the authority to supervise the digital financial industry.
Reporting by Citro Atmoko
Editing by Libertina W Ambari
Reporter: Antara
Editor: Yosep Hariyadi
Copyright © ANTARA 2018
