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New Regulation on Technological Innovation in Indonesia's Financial Services Sector

On 16 February 2024, Indonesia’s Financial Services Authority (OJK) issued Regulation No. 3 of 2024 on Implementation of Technological Innovation in the Financial Services Sector (the OJK Technological Innovation Regulation, available here), replacing OJK Regulation No. 13 of 2018 on Digital Financial Innovation in the Financial Services Sector (Regulation 13/2018, available here) and coming into effect on 19 February 2024.


The issuance of Law No. 4 of 2023 on the Development and Strengthening of the Financial Services Sector on 12 January 2023 (the Financial Services Omnibus Law) strengthened OJK’s mandate to regulate and supervise technological innovation in the financial services sector. With this updated OJK regulation on technological innovation in response to the Financial Services Omnibus Law, OJK aims to regulate technological innovations affecting products, activities, services and business models across Indonesia’s digital financial ecosystem. OJK’s new mandate to supervise digital financial assets is reflected in the expanded scope set out in the OJK Technological Innovation Regulation.


We set out here some of the notable features of the OJK Technological Innovation Regulation.

Scope of regulation. In line with the scope of the Financial Services Omnibus Law, technological innovation in the financial services sector covers the following areas:

  • settlement of securities transactions;
  • capital raising;
  • investment management;
  • risk management;
  • collection and/or channelling of funds;
  • market support;
  • activities relating to digital financial assets, including crypto assets; and
  • other digital financial services activities.

Notably, crypto assets are expressly covered, with OJK mandated by the Financial Services Omnibus Law to supervise digital financial assets, including crypto assets. The transfer of this supervision from the Commodity Futures Trading Agency (Bappebti) to OJK is currently still ongoing and is mandated by the Financial Services Omnibus Law to be completed by January 2025.

Institutional aspects. Technological innovation can be carried out by financial services institutions or other parties engaging in the financial services sector in line with applicable laws and regulations.

The OJK Technological Innovation Regulation states that these financial services institutions and other parties should be either a limited liability company or another form of legal entity in line with prevailing law, whereas under Regulation 13/2018, the parties could only be limited liability companies or cooperatives.

Parties are required to implement appropriate safeguards, particularly in relation to cyber security, consumer protection, and personal data protection. They must also comply with OJK’s licensing requirements.

Regulatory sandbox. The new regulation still contemplates a regulatory sandbox, aiming to ensure that technological innovation and development in the financial services sector is conducted responsibly and with appropriate risk management.

However, the nomenclature used to describe the registration and licensing process has changed. Regulation 13/2018 had provided for three stages: (1) sandbox recording; (2) sandbox participation; and (3) registration, while the new regulation contemplates: (1) sandbox participation; (2) registration, which may be a pre-requisite to licensing in some cases; and (3) licensing.

To participate in the regulatory sandbox, a party must submit an application, testing plan, and other supporting documents to OJK. OJK will then assess whether the innovation meets the criteria, including whether the innovation has a significant differentiating feature, gives added value to consumers, and is ready for testing and development.

The regulatory sandbox covers provision of the following facilities:

  1. trial for a limited period in a defined environment;
  2. explanation of the applicable regulations in the financial services sector;
  3. development of technological innovation at an early stage; and
  4. other facilities to support the trial and development of the technological innovation.

Results of regulatory sandbox. Successful applicants will typically enjoy the facilities granted by OJK through the regulatory sandbox for up to a year, although OJK has the discretion to set a different period.

Each participant must submit a final report at least 20 working days before the sandbox period ends, and OJK will consider this report in determining whether the innovation passes the evaluation. Those passing the evaluation stage must apply for a business licence within six months of receiving OJK’s confirmation letter, which period may be extended. During that period, participants can continue business operations under the regulatory sandbox regime.

In certain cases, OJK may require participants to register before applying for a licence, and OJK will issue further rules on the registration mechanism in due course.

Parties carrying out similar technological innovations to sandbox participants can also register with or apply to OJK for a licence without having to undergo the regulatory sandbox process themselves.

Supervision and reporting. The OJK Technological Innovation Regulation also contains detailed provisions on supervision by OJK and the industry association, and on the reporting requirements, along with an increased emphasis on consumer protection, financial literacy, and personal data protection.


Overall, OJK’s new technological innovation framework provides more clarity for the financial services sector. OJK has taken the opportunity to make necessary updates to better align the regulatory framework with industry developments and technological advances, and to finetune the legal basis for technological innovations in the financial services sector.

We can expect more implementing regulations from OJK shortly, covering both the regulatory sandbox and OJK’s supervision of registered and licensed entities.

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