Hence, Indonesia should make various efforts to develop the financial sector, but concurrently, continue to conduct good supervision.
"This is why we issued the Financial Sector Development and Strengthening Law (UU P2SK)," Nazara noted during a national web seminar of the Indonesian Economist Association (ISEI) that was monitored online in Jakarta, Tuesday.
The P2SK Law was designed to respond to the dynamics in the financial service industry in the form of financial sector technology innovation (ITSK), or commonly known as financial technology (fintech).
Nazara said that in the making of the P2SK Law, there were challenges on how to make the law to be able to anticipate the development and supervision of financial technology in Indonesia in the future.
This is because the entire world's economy is rapidly transitioning towards digital and integrated, including the financial sector.
The current trend of companies in the technology sector is toward big tech, or the United States' technology giants, which is marked by the emergence of big-tech group conglomerates.
In Indonesia, some 352 financial technology companies were recorded in 2021. The number has increased significantly from year to year, with 24 companies recorded in 2016, some 79 companies in 2017, some 178 companies in 2018, some 256 companies in 2019, and some 302 companies in 2020.
"This is why we are also strengthening the supervision and development of conglomerate businesses in financial services in the P2SK Law," he remarked.
However, to avoid the risks involved in digitalization, he said the P2SK Law will also strengthen the protection of investors and consumers as well as encourage financial literacy.
This is seen in a comprehensive manner along with the development of all financial services sectors, such as banking, non-banking, capital markets, financial institutions, and ventures, to the carbon market that will soon be present in Indonesia.
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Translator: Agatha Olivia Victoria, Cindy Frishanti Octavia
Editor: Azis Kurmala
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