JAKARTA - Indonesia s financial watchdog is set to outline by the middle of this year how digital banks should operate in the country, one of its top officials disclosed in an interview with The Straits Times. We won t regulate details, or it won t be rule-based. It will instead be a set of guiding principles for banks to operate digitally, that banks have to mitigate their own risk, any risk that may arise, said Anung Herlianto, OJK s executive director of banking research and regulation.
Digital banking is expected to provide a boost to Southeast Asia s largest economy as it will cater to the unbanked who comprise up to one third of the population of 270 million. But smartphone penetration in the country has reached 70 to 80 per cent.
The Straits Times
Adoption, penetration of digital financial services to get boost as more transact online
Regional Correspondent
A customer making payment for her purchases using digital payment service GoPay in Jakarta. Indonesians have switched to digital payment methods to minimise face-to-face interactions and trips to physical banks.PHOTO: BLOOMBERG
PublishedFeb 16, 2021, 5:00 am SGT
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Indonesia s financial watchdog is set to outline by the middle of this year how digital banks should operate in the country, one of its top officials told The Straits Times. We won t regulate details, nor will it be rules-based, said Mr Anung Herlianto, executive director of banking research and regulation at the country s Financial Services Authority (OJK). It will instead be a set of guiding principles for banks to operate digitally, and banks have to mitigate their own risk, any risk, that may arise.
Digital banking is expected to provide a boost to South-east Asia s largest economy as it will cater to the unbanked who comprise up to one-third of the population of 270 million.
SINGAPORE - The Covid-19 pandemic has propelled contactless and cashless transactions in Indonesia at warp speed, paving the way for virtual banks which will be a game changer for millions of people in the country without bank accounts.
Fintech has boomed in recent years, providing more streamlined and efficient financial services and faster onboarding process. The pandemic has led to even more growth particularly in mobile payments and peer-to-peer lending, analysts say.
Like elsewhere in the world, Indonesians have switched to digital payment methods to minimise face-to-face interactions and trips to physical banks. Those who have been laid off are taking loans from peer-to-peer lending platforms, which offer lower interest rates and more flexible terms than traditional banks.