MICROCAPITAL BRIEF: Indonesia Expands Consumer Protection Regulations for Financial Institutions

Otoritas Jasa Keuangan (OJK), Indonesia’s financial regulator, recently announced a new set of regulations intended to protect customers of financial services providers (FSPs). The regulations apply to traditional banks and financial technology (fintech) firms now, although microfinance institutions are exempt for the next five years. One element of the new system requires the consideration of consumer protection throughout product life cycles, including building protection efforts into the product planning stage, rather than simply the ongoing services or dispute resolution stages. FSPs also will be required to record and store conversations that staff have with customers via phone to combat misinformation. Other elements of the regulations stipulate that FSPs: (1) increase the measures they take to protect the consumer data they collect; (2) provide a minimum level of consumer education and boost support for consumers who are elderly or disabled; (3) expand product disclosures and institute waiting periods for certain agreements to give consumers more time to learn about their rights and responsibilities regarding such agreements; and (4) increase their reporting to OJK on these activities.

Founded in 2012, OJK is tasked with monitoring FSPs with the aim of protecting customers, boosting “public prosperity” and increasing the competitiveness of Indonesia in the global economy.

By Ben Greissman, Research Associate

Sources and Additional Resources

East Asia Forum article on POJK
https://www.eastasiaforum.org/2022/06/25/indonesias-financial-sector-needs-more-consumer-protection/

OJK press release
https://www.ojk.go.id/iru/policy/detailpolicy/9136/press-release-ojk-issues-new-consumer-protection-regulation

OJK homepage
https://www.ojk.go.id

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