Out-Law News | 21 Nov 2016 | 11:43 am | 1 min. read
The fintech office of the Bank Indonesia (BI-FTO) will run a regulatory sandbox to allow developers to test their products under relaxed regulations, the central bank said (link in Indonesian).
It will also provide services to help developers to understand Indonesia's regulatory policies on fintech, gather and disseminate information on developments, and hold regular meetings with authorities and international bodies interested in the use of technology in finance, Bank Indonesia said.
Bank Indonesia governor Agus Martowardojo said: "We have come to the conclusion that technological innovation is inevitable. With rapid changes, regulations should not try to precede innovation, but should stay close to innovation."
A supportive climate for business must be established while being aware of potential risks, he said.
"BI-FTO is our attempt to maintain a level playing field through a regulatory regime that is balanced and proportioned without slowing the pace of innovation," he said.
Indonesian consumers are increasingly shopping online and are expecting the same services from financial institutions, he said. At the same time, the global financial crisis of 2008 shook public confidence in the formal banking system, so fintech products must provide the public with security, Martowardojo said.
Indonesia's launch of a regulatory sandbox for fintech follows similar announcements from Singapore and Hong Kong, with both countries following the lead taken by the UK's Financial Conduct Authority (FCA) in developing a regulatory sandbox initiative.
Singapore launched a sandbox in June, and released updated guidelines for the service this month.
Hong Kong launched its own regulatory sandbox in September.