Indonesia’s OJK Issues Regulation to Support Banking Sector Digital Transformation

The Financial Services Authority (OJK) has issued two new regulations aimed at enhancing the competitiveness of Indonesia’s banking sector by supporting digital transformation in the industry.

Level Playing Field for Banking Institutions According to OJK Chief Executive of Banking Supervision Dian Ediana Rae, the new regulation provides a level playing field for banking institutions to develop digital services. The focus is on IT infrastructure and management rather than risk profile requirements. The regulation also emphasizes the importance of cooperation in implementing digital services, IT utilization, e-signature, and data privacy protection.

POJK Number 21 of 2023: Digital Services by Common Banks The POJK outlines the scope and requirements of digital services, including procedures for permission, cooperation in implementation, IT adoption that supports business functions, as well as customer and data privacy protection. This regulation is a refinement of previous guidelines and is designed to support the development of the financial sector as outlined in Law Number 4 of 2023.

SEOJK Number 24/SEOJK.03/2023: Digital Maturity Assessment for Bank In addition to the POJK, OJK has also issued SEOJK Number 24/SEOJK.03/2023, which serves as a guideline for determining, assessing, and evaluating bank digitalization rates. The assessment includes evaluation of governance, architecture, risk management, cyber resilience and safety, technology, data, collaboration, and consumer protection.

Self-Assessment Requirements The regulation requires banks to conduct self-assessment at least once a year, taking into account internal and external conditions.

Benefits of the Regulation The issuance of the POJK and SEOJK is expected to encourage digitalization and collaboration among banks, enhancing their competitiveness and fulfilling stakeholders’ expectations.

Accessing More Information More information on the regulations can be accessed through SIKePO app, which is available for download on Google Playstore and Apple App Store.