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AML and CFT Risks in Digital Payments in Indonesia: A Study on Open Banking Optimization

Introduction

The rapid growth of digital financial services in Indonesia has brought about new challenges for anti-money laundering (AML) and combating the financing of terrorism (CFT). As the country moves towards a more digitalized payment system, it is crucial to ensure that AML/CFT risks are effectively mitigated.

Methodology

This study aimed to verify whether open banking optimization can be used as an effective tool in enforcing AML/CFT regulations. The authors analyzed data from various financial institutions and found that open banking can significantly reduce the risk of AML/CFT violations.

Key Factors for Effectiveness

The study identified several key factors that contribute to the effectiveness of open banking optimization, including:

  • Level of integration between financial institutions
  • Quality of customer due diligence
  • Presence of robust AML/CFT controls

Findings and Implications

The findings of this study have important implications for policymakers and regulators in Indonesia. They suggest that open banking optimization can be a valuable tool in reducing AML/CFT risks and promoting financial inclusion.

However, the authors also note that there are several challenges associated with implementing open banking optimization, including:

  • Need for significant investment in technology
  • Potential for increased regulatory complexity

Conclusion

Overall, this study provides important insights into the role of open banking optimization in mitigating AML/CFT risks in digital payments. It highlights the importance of integrating AML/CFT controls with financial inclusion initiatives to promote a more secure and stable financial system.

References

  • Ganda Raharja Rusli and Anestia Hayubriandini Fermay (2024). AML and CFT Risks in Digital Payments in Indonesia: A Study on Open Banking Optimization. AML/CFT Journal: The Journal of Anti Money Laundering and Countering the Financing of Terrorism, 2(2), 159-174.
    • DOI: 10.59593/amlcft.2024.v2i2.158
    • Date: June 1, 2024