Bank Indonesia's Role in Fintech Companies

Financial Technology (Fintech) is a tangible form of the great development of the digital revolution in this era. Fintech is a technology-based financial service that aims to make it easier for various parties to use it. In the system, fintech often relies a lot on software, the internet, websites, and other digital assets.

The presence of fintech in the financial industry turns out to have a significant impact on our society's financial ecosystem. From people who are used to shopping using paper money, now people are slowly starting to use fintech as a means of non-physical (cashless) payments.

With the rapid development of technology, of course, the financial industry also cannot remain silent. They must have the courage to start using technology as their tool in supporting their financial products, both existing and new products. Because if they don't innovate, they will soon lose competitiveness with new competitors who are already selling technological conveniences in their products.

Especially considering the very broad scope of fintech, starting from storage, payment, and financing, to insurance services, making fintech easy for the public to accept. In the future, fintech is also expected to be able to advance Indonesia's national economy, because of its huge potential.

Currently, fintech can also provide solutions for industrial growth, especially for technology-based companies (such as e-commerce, Ride-Hailing, online private tutoring, online travel agencies, etc.), as well as being an efficient facilitator for creative entrepreneurs. so that their business can reach a wider market.

In order for fintech to run well, and not to be misused by some elements, of course, various rules are needed that regulate fintech's performance, and there must be strict supervision from the authorities.

In Indonesia, one of the institutions that oversees the performance of fintech is Bank Indonesia. Who doesn't know Bank Indonesia? Bank Indonesia is the central bank of the Republic of Indonesia, which is an independent state financial institution, free from interference from the Government and/or other parties, except for matters explicitly regulated by law.

As the central bank, Bank Indonesia has one main goal, namely to achieve and maintain the stability of the rupiah, as the national currency. The stability of the value of the rupiah itself contains two aspects, namely the stability of the value of the currency against goods and services, and the stability of the currencies of other countries, such as the dollar.

So that the value of the rupiah remains stable, there are 3 main pillars that have become their task to date, namely:

- Establish and implement monetary policy.

- Regulating and maintaining the smooth running of the payment system.

- Maintaining financial system stability.

So, from these 3 pillars, we can conclude that Bank Indonesia is responsible for the stability of various financial systems in our country, including fintech. Therefore, Bank Indonesia basically has a role in fintech in several aspects, including:

- In terms of providing a market for business actors, Bank Indonesia ensures protection for consumers, particularly regarding the guarantee of the confidentiality of consumer data and information.

- In terms of savings, loans, and equity participation, Bank Indonesia requires every business actor to comply with macroprudential regulations, deepening of financial markets, payment systems to support operations, and cyber security to safeguard consumer data and information.

- In terms of investment and risk management, Bank Indonesia also requires every business actor to comply with macroprudential regulations, deepening of financial markets, payment systems to support operations, and cyber security to safeguard consumer data and information.

- In terms of payment, settlement and clearing, Bank Indonesia ensures protection for consumers, especially regarding the guarantee of confidentiality of consumer data and information through cyber security networks

- In order to ensure the security and order of payment traffic, act as a facilitator in terms of providing land for paid traffic and conduct intelligent business analysts for business actors related to fintech to provide views and directions on how to create a safe and orderly payment system.

As the setter of monetary policy, Bank Indonesia has also issued several regulations related to fintech, including:

- Bank Indonesia Regulation No.18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing;

- Bank Indonesia Regulation No.19/12/PBI/2017 concerning the Implementation of Financial Technology;

- Regulation of members of the Board of Governors No.19/14/PADG/2017 concerning Financial Technology Regulatory Sandbox; and

- Regulation of Members of the Board of Governors No.19/15/PADG/2017 concerning Procedures for Registration, Submission of Information, and Monitoring of Financial Technology Operators.

Regulation of Members of the Board of Governors No.19/15/PADG/2017 concerning Procedures for Registration, Submission of Information, and Monitoring of Financial Technology Operators.

Hope it is useful!