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Indonesia Accelerates Digital Transformation for Broader Economic Development

The Chairman of the Indonesian Financial Services Authority (OJK), Wimboh Santoso, Board of Commissioners, discussed the development and immense potential of the Indonesian financial technology (fintech) and digital finance industries, as well as OJK’s Sustainable Finance policies to support the Government of Indonesia’s green economy policies at a bilateral Fintech Forum.

He emphasised that Indonesia’s digital financial potential must be used and directed so that fintech and digital finance may benefit the economy and society. “The potential of Indonesia’s digital economy must be quickly optimised to increase Indonesia’s economic competitiveness in the region and the global environment.”

With all these programs, we hope that Indonesia has a strong domestic customer base in the digital finance sector and a well-developed digital economy ecosystem. Thus, Indonesia can compete with other countries in the region.

– Chairman, Indonesian Financial Services Authority

The agency will continue to strive to accelerate digital transformation through the development of an economic ecosystem and digital financing to capitalise on this potential. This is consistent with Indonesia’s demographic and internet access potential for developing the digital economy industry. Amid the pandemic that limits people’s mobility, the digital economic transformation is expected to become the backbone of national economic recovery.

OpenGov Asia reported, in providing guidelines and operationalising digital banking, the Financial Services Authority (OJK) has officially released the Blueprint for Digital Banking Transformation. The launching is intended to be a policy milestone in addressing the issues and risks associated with banking’s digital transformation.

The Blueprint for Digital Banking Transformation also aims to set rules for the banking industry, according to Heru Kristiyana, the Chief Executive of OJK Banking Supervision. “We will communicate the newly printed banking blueprint to all stakeholders,” he said today during the virtual introduction of the digital transformation blueprint. According to Heru, over time, traditional banking will be eroded if it does not carry out digital transformation.

it is underscored that the financial services sector must respond to consumer needs to carry out the digital transformation that will provide the community with convenience and faster financial services, including expanding access to financing for MSME actors.

The fintech and digital finance industries must also make it easier and more accessible for the unbanked and MSME players to enjoy digital financial products and services. OJK also allows banks to collaborate with fintech in the development of their businesses.

Several programmes have been prepared by OJK, such as:

  • Build an integrated digital-based MSME ecosystem from upstream to downstream.
  • In the financing aspect, OJK involves financial technology companies as well as Fintech P2P Lending and Securities Crowdfunding to facilitate MSME players in obtaining alternative financing with easy terms.
  • In the field of marketing, OJK continues to provide guidance to MSMEs by cooperating with start-ups and universities to build MSME Campuses that provide intensive training so that MSMEs can be directly onboard digitally.

OJK’s commitment to sustainable finance

To facilitate a smooth transition to a low-carbon economy, the Financial Services Authority (OJK) has made a long-term commitment to Sustainable Finance. OJK continues to support the Indonesian government’s commitment to the Paris Agreement and the country’s efforts to attain the Net Zero Emissions objective, including the NDC and the Long-Term Strategy for Low Carbon and Climate Resilience 2050. (LTS LCCR).

The Chairman of the Indonesian Financial Services Authority (OJK) highlighted OJK’s commitment to sustainable finance, which began with the release of the Sustainable Finance Roadmap in 2015 and continued in the second phase from 2020 to 2024.

The Sustainable Finance Roadmap’s strategic objectives include establishing an ecosystem that supports the acceleration of sustainable finance, increasing the supply and demand for funds and environmentally friendly financial instruments, and strengthening supervision and coordination of sustainable finance implementation in Indonesia.

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