Increase OJK Consumer Protection Release Market Product Scheme, What's That?

Illustration (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) has just launched a new market conduct scheme to strengthen the financial industry sector.

Chairman of the OJK Board of Commissioners, Wimboh Santoso, said that the implementation of the market conduct was the answer to the challenges of the emergence of new technology-based financial products and services. According to him, this phenomenon is considered not to be balanced with increasing literacy and increasing understanding of product risks.

"This is a real effort to provide consumer protection for the financial services sector," he said through a virtual channel on Thursday, July 7.

Wimboh added, in the era of the open economy which is very competitive, the returns from the investment instruments offered are highly dependent on the large interest rates set by banks as a reference.

This condition encourages consumers of financial services to look for various alternative financial instruments that are able to provide high yield or return, but of course have a high risk as well (high risk, high return).

"In this case, the market conduct is important so that financial service institutions have responsibility for the financial instruments or investment offered so that people have a good understanding of the potential risks that will arise in the future," he said.

Wimboh explained that when referring to the Financial Stability Board, the market conduct is the procedures and behavior of financial service actors in designing financial products/services and making offers to the public.

Market conduct is also related to the delivery of information, the preparation of agreements with consumers, as well as the resolution and handling of consumer disputes in a financial services institution.

"In order to strengthen the implementation of the market conduct and encourage transparency of information to consumers, the OJK has just issued provisions governing the implementation of the market conduct, namely OJK Regulation No. 6 of 2022," he said.

He also revealed that the provision is a refinement of regulations related to market conduct that bind financial services actors, including through the obligation to design/test financial products and services to assess potential risks to consumers.

And it is the implementation of the product life cycle stage before a financial product and service is launched to the public.

"Perpetrators of financial services must have a compliance market conduct unit and a compliance staff whose number considers the size of these financial institutions, for example total assets, number of offices, and complexity of their products," he said.

This unit functions to evaluate the implementation of the compliance program with consumer protection principles, including evaluating video recordings or the sound of sales activities carried out by agents as well as handling complaints from consumers.

The application of this provision is not only in favor of consumers but also balances the interests of consumers and financial service actors while still considering cost and benefits analysis. The expected result is that the number of public complaints on financial products and services can gradually decline along with its implementation," concluded OJK Chairman Wimboh Santoso.