Banks to Develop Digital Finance

Bank Indonesia (BI) is revising the regulatory sandbox scheme by requiring the integration of fintech into the government and banking services as part of the plan to push the digital economy and financial inclusion. The new regulatory sandbox allows the fintech firms to freely innovate as long as within regulation boundaries as well as calculated profit and risk.

The new scheme will oblige fintech companies to apply biometric and facial-recognition technologies. BI views both techniques are the perfect implementations of the know-your-customer principle and the most suitable means to prevent money laundering and terrorism funding. The application of both technologies, added by the open banking, will not only eliminate the shadow banking practices but also cement the banks’ status as the central institution in the digital economy.