New Financial Services Products Must Enter Sandbox Regulatory

JAKARTA - The Financial Services Authority (OJK) continues to improve technology in the financial sector through the implementation of Regulatory Sandbox as a further effort in managing innovation in the financial sector.

This is through the issuance of OJK Regulation Number 3 of 2024 (POJK 3/2024) concerning the Implementation of Financial Sector Technology Innovation (ITSK).

Chief Executive of the Supervision of Financial Technology Innovation, Digital Financial Assets, and Crypto Assets, Hasan Fawzi said, OJK is committed to ensuring that new products or services developed by financial services institutions (LJK) such as banking, insurance, and crypto companies are guaranteed to be safe for use by consumers.

According to Hasan, this is done to protect consumers from losses and to ensure that it runs, the OJK develops a regulatory sandbox or trial room or innovation development.

"For innovators at that time, they have not been able to translate their business models or activities, they must be licensed by the OJK, so they must submit or register with the sandbox regulatory in the OJK. Later we will have a feasibility criterion whether the person concerned enters or matches the sandbox, or provides a statement whether his activities do not have to enter the sandbox," he said in a media briefing, Tuesday, March 26, 2024.

Hasan said, as well as products or services on crypto assets, if the crypto surveillance and regulatory transition has entered the OJK, it is necessary for crypto products to follow the sandbox.

"When it comes to the transfer of tasks in the OJK, the section also has the same potential to take advantage of the existence of sandboxes, we invite new initiatives related to business or innovation models, new mechanisms, new products or services that are carried out for digital finance in general, including crypto asset activities, so it is the same as other digital financial assets, crypto assets are included in one ITSK," he said.

On the same occasion, Head of the Department of Financial Sector Technology Regulation and Licensing, Digital Financial Assets and Crypto Assets, Djoko Kurnijanto, said that the entry of new financial sector products or services to the sandbox does not have to be an initiative from the company.

However, OJK can also request that the service be included in the sandbox regulation.

"In this POJK, it also gives OJK the authority to ask the LJK to carry out sandbox regulations. So for example, when there is coordination with banks and seeing 'Wow, this is really new,' there is no initiative from the LJK, we can ask them to enter the sandbox regulation again. So this POJK can be two-way, other parties can also initiate us," he explained.

For information, POJK 3/2024 is a follow-up to the mandate of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK).

Meanwhile, POJK 3/2024 is expected to be able to create an integrated Financial Technology (Fintech) ecosystem with an activity-based approach that aims to support innovation by ensuring effective consumer protection and risk mitigation.

In addition, in POJK 3/2024 there is improvement to the Regulatory Sandbox mechanism, which is an OJK facility to test and develop innovative financial technology, is one of the main focuses in regulations.