Figure out the roles of Bank Indonesia in supporting the fintech Innovation in Indonesia
Many Indonesian people are not familiar with the fintech term. Financial technology or also known as fintech is the innovation of the technology which aims to improve the activities in the financial issues and serve the use of delivery of financial services.
The purpose of this financial technology is to facilitate the Indonesian people to access the financial products and transaction as well as to increase the innovation of the financial services. Therefore, Bank Indonesia supports the development of the fintech innovation by monitoring and organizing the use of the services in Indonesia. Here are some roles of Bank Indonesia in supporting the innovation of financial technology in Indonesia.
Maintaining the consumer protection and the risk mitigation
One of the roles of Bank Indonesia in supporting the innovation of fintech in Indonesia is by protecting the convenience and safety of the consumers and maintaining the risk management when the consumers do the transaction.
Some ways that Bank Indonesia does to protect the consumers in the short term are by observing and organizing the payment, clearing, and settlement of the fintech industry. Furthermore, Bank Indonesia also considers organizing the crowdsourcing, the investment, or peer to peer lending (aka P2P lending) for the long-term action.
As a result of the short and long-term action, the consumers can take the legal action if they have the problems or suffer from the financial loss because of the fintech service or products used.
Mapping the fintech industry in Indonesia
Many Indonesian people are not familiar with the online financial service. As the development of the fintech business grows rapidly, Bank Indonesia does the mapping to monitor the development of the industry regularly.
The purpose is to figure out the real condition that is happening toward the spread of the fintech service in Indonesia, the impacts in Indonesian economic sector, and the financial stabilization.
The mapping will also indicate the situation of the business (e-commerce, startup, etc.) and the scale of the business in this industry.
Making the regulations toward the newest innovation of fintech
Another role of Bank Indonesia in supporting the fintech innovation in Indonesia is by making the regulations toward its innovative service or products. When it comes to the innovation in this industry, the businessmen who invest need to pay attention to the regulations. In fact, sometimes the regulations in Indonesia are not compatible or up-to-date toward the innovative product or services invented. It brings about the hindrance to the development of fintech in Indonesia.
Therefore, to overcome this issue, Bank Indonesia issues a regulatory sandbox. Regulatory sandbox is a mechanism for developing regulation for innovators in the fintech industry who have the innovative products, but the products are constrained by regulation that is irrelevant or does not exist yet. By having this sandbox, the consumers feel convenient to use the new products or services because Bank Indonesia will monitor the products or services for the consumers’ satisfaction.
By knowing the roles of Bank Indonesia in supporting the innovation of fintech in Indonesia, the businessmen do not need in doubt to create the innovative products or services in the future. The consumers will feel safe to use the products or services, too.