The Financial Services Authority, or OJK, recently said that it sought to balance between driving the insurance industry’s growth and safeguarding the consumers, as more insurers embrace digital transformation. Indonesia’s high internet penetration offers a huge opportunity for the insurance industry. Data shows 202.6 million people or about 73.7% of the population in Indonesia are internet users. Around 96.4% or 195 million people surf the internet on their smartphones.
We anticipate there will be a boom in information technology adoption within the insurance industry after the pandemic. The Post-Covid Revival of the Insurance Industry. We are not only tasked to spur the industry’s sustainable growth but also ensure consumer protection. So despite this digital momentum’s potential, we still have to pay attention to the consumer protection aspect.
– Ahmad Nasrullah, Head, Nonbank Financial Institution Supervision Department, OJK
OJK itself has been looking to accelerate the insurance industry’s digital transformation under its 2021-2025 master plan. OJK’s policy direction over the next few years includes strengthening tech-based supervision and consumer protection. OJK will also pursue this balance between growth and consumer protection when regulating insurance technology (insurtech).
OJK will soon roll out the technical regulations on insurtech in hopes of its initial goal, namely making regulations that balance between the industry needs, contribution to the economy and financial system stability, as well as consumer protection. customers could enjoy a more streamlined process if insurers embrace technology. Customers can also save costs, with processes becoming much faster and optimum.
To this end, an insurance company in Indonesia is digitalising its business from end to end. Among others by launching a product that enables customers to buy insurance face-to-face digitally. The company focuses on customers and technology eventually bore fruit.
OJK was preparing a blueprint for the digital transformation of banking that would be launched, OJK’s deputy commissioner of banking supervision. OJK was preparing a blueprint for digital transformation for banking that will provide a more concrete reference related to banking digitalization in the future. The blueprint is being created to accelerate digital transformation in the banking sector. The blueprint is also expected to become a policy breakthrough in mitigating the possible challenges and risks of banking digital transformation
The blueprint for banking digital transformation would present a more detailed description of Indonesia’s banking development road map. Some of the policies that will be outlined in this blueprint include the principles of data protection implementation and data transfer policies. Policies related to data management or data governance will also be outlined.
The blueprint will also encompass information technology governance and architecture, as well as policies related to cybersecurity based on international standards. Outsourcing policies and standards of cooperation with third parties, as well as the institutional order that supports digital transformation, will also be contained in the blueprint.
As reported by OpenGov Asia, OJK wants to encourage banks to improve information technology governance and risk management. This is in line with the banking industry’s migration from the old banking system to digital banking. Banking Supervision Deputy Commissioner, OJK as previously stated, banks must anticipate issues such as customer data protection and exchange, the risk of customer data leakage connected to fraud, probable incompatibility of technology investments with business strategy, and others.
In the banking industry, Bank DKI, as the Regional Bank, has taken precautions to protect itself from cyber-attacks, one of which is the IT Security Cyber Architecture method. Amirul Wicaksono, Director of Technology and Operations at Bank DKI, stated that the organisation is still safe from cyber threats due to bank laws. “Banks have regulations, such as regulations on risk management in the use of technology (MRTI). OJK also always audits the risk mitigation function and the function to ward off cyberattacks.”
