The presence of two OJK Members of the Board of Commissioners (ADK) who were inaugurated at the Supreme Court (MA) on August 9, 2023 became a new milestone in the duties and role of the OJK in carrying out the mandate of Law 4/2023 concerning Financial Sector Development and Strengthening (PPSK).
Agusman was elected as Chief Executive Supervisor of Financing Institutions, Venture Capital Companies, Microfinance Institutions and Other Financial Services Institutions. Then, Hasan Fawzi was elected as Chief Executive Supervisor of Financial Sector Technology Innovation, Digital Financial Assets and Crypto Assets.
This was conveyed by Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar in a press conference in Jakarta, Friday (18/8/2023).
Mahendra added, Article 10 of the PPSK Law mentions two additional OJK ADKs, namely the Chief Executive of the Supervisor of Financing Institutions, Venture Capital Companies, Microfinance Institutions and Other Financial Services Institutions and the Chief Executive of the Supervisor of Financial Sector Technology Innovation, Digital Financial Assets and Crypto Assets."The presence of these two OJK ADKs is certainly expected to strengthen the duties, functions, authorities and role of OJK in carrying out the mandate of the PPSK Law which aims to further encourage the contribution of the financial sector to inclusive, sustainable and equitable economic growth in order to improve people's lives, reduce economic inequality, and realize a prosperous, advanced and dignified Indonesia," Mahendra said.
Financing Institution Supervision
The Executive Head of Supervision of Financing Institutions, Venture Capital Companies, Microfinance Institutions and Other Financial Services Institutions (PVML) will have the duties and functions to coordinate the implementation of a system of supervision, licensing, regulation, special examinations as well as developing directions, strategies, policies, implementing quality assurance and managing and providing information systems for supervision and licensing as well as surveillance and crisis management protocols for companies in the PVML sector both conventional and sharia.
The scope of the financial services industry under the supervision of ADK PVML includes: Financing Companies, Infrastructure Financing Companies, Venture Capital Companies, Specialized Financial Institutions (sui generis), Technology-Based Financing Businesses (Fintech Lending and Paylater), Pawnbroking Companies, Microfinance Institutions, and Other Financial Services Institutions, including cooperatives in the financial services sector.
The sui generis financial institutions under the supervision of the PVML EC consist of the Indonesian Export Financing Agency ("LPEI"), the Public Housing Savings Management Agency ("BP Tapera"), PT Sarana Multigriya Finansial ("SMF"), and PT Permodalan Nasional Madani ("PT PNM"),
Agusman is committed to implementing the policy direction of strengthening prudential aspects and encouraging the development of the entire PVML sector industry in order to grow in a healthy and sustainable manner, which includes the following:
Strengthening the resilience and competitiveness of the PVML sector through strengthening capital, implementing governance and risk management, expanding funding sources, expanding access to financing, human resource competence, and implementing consumer literacy and protection.
Development of elements in the PVML sector ecosystem through synergies with financial services institutions, priority economies, MSMEs, credit rating systems and the halal industry as well as socializing collection mechanisms and collateral execution.
Accelerating the digital transformation of the PVML sector through increasing the capacity to use information technology, mapping and phasing the industrial digitization process, increasing the capacity for digital transformation and increasing the capacity for implementing regulatory technology.
Strengthening regulation, supervision and licensing through improving the provisions of level playing field aspects, improving spin off provisions, improving Governance, Risk, and Compliance (GRC) provisions, preparing technology-based supervision provisions and sustainable finance.
For sui generis financial services institutions, in addition to building GRC strengthening, OJK is committed to supporting the increase in the role and contribution of each special financial institution as a special mission vehicle as the core competencies of each institution.
Financial Sector Technology Innovation
The Chief Executive of the Supervisor of Financial Sector Technology Innovation (ITSK), Digital Financial Assets and Crypto Assets (IAKD) will have the duties and functions to coordinate the implementation of the supervision system, licensing, regulation, special examinations and develop directions, strategies, policies in the field of IAKD.
In accordance with the PPSK Law, the scope of the IAKD field includes, among others, technological innovation in the collection of public funds, investment management, and settlement of securities transactions. It also includes technological innovation in risk management, claims handling, distribution and sales as well as technological innovation in the collection and/or distribution of funds.
The IAKD field will also include market support technology innovations to meet the needs of IJK including credit scoring, aggregators, and e-know your customer.
It also covers activities related to digital financial assets, including crypto assets, as well as other digital financial services activities.
In this area, Hasan Fawzi is committed to implementing INOVASI's seven pillars of strategy in building the financial sector technology innovation sector, and digital financial assets, including crypto assets in Indonesia which include the following:
Investor Protection and Consumer Protection through a holistic investor and consumer protection program, in coordination with the Chief Executive of the Financial Services Business Conduct Supervisor, Education, and Consumer Protection.
Normalization of OJK regulation and supervision that supports development, balanced, and collaborative innovation;
Optimization of literacy, inclusion, and utilization programs for Financial Sector Technology Innovation, Digital Financial Assets and Crypto Assets; also in coordination with the Executive Head of Financial Services Business Conduct Supervision, Education, and Consumer Protection;
Variation of strategies and programs on Financial Sector Technology Innovation, Digital Financial Assets and Crypto Assets;
Acceleration of Green Economy and New Economy development;
Synergy and collaboration together to build the industry; and
Market integrity through the development of industrial ecosystems and institutional transformation concerning aspects of governance, human resources, and technology.
The implementation of these seven strategies will be pursued through a mix of policies and strategic plans that will support development innovation, in a balanced and collaborative manner, by prioritizing key principles, namely: consumer protection, market integrity, and preventing systemic risk.