The Existence of Regulatory Sandbox to Encourage the Growth of Financial Technology in Indonesia

Bank Indonesia created an appropriate regulatory regime to drive the pace of innovation carried out by Financial Technology Providers while still applying the principles of consumer protection, risk management and prudence. One of the efforts made by Bank Indonesia was by issuing provisions concerning a regulatory sandbox for Financial Technology Providers along with their products, services, technology and/or business models in a Board of Governors Member Regulation No 19/14/PADG/2017 on the Limited Technology Testing Room (Regulatory Sandbox) Financial Technology. Meanwhile, the Financial Services Authority also issued regulation regarding the Regulatory Sandbox for Financial Technology Organizers in Financial Services Authority Regulation No. 13 / POJK.02/2018 on the Digital Financial Innovations in the Financial Services Sector. The main point of view to be analysed is the existence of regulatory sandbox approach held by Bank Indonesia and the Financial Services Authority as an effort to encourage the growth of Financial Technology in Indonesia

Ideas for a regulatory definition of FinTech

Purpose: The aim of the paper is to develop the approach to a legal definition of FinTech. Design/Methodology/Approach: In this paper we evolve possible approaches of FinTech legal definition, investigate existing approaches at the international level and examine the policies applied at the national levels. Document analysis, as a form of qualitative research, was used in this study. Findings: We found that in most countries the legislation does not specifically address fintech companies, and the legal framework equally regulates the activities of traditional service providers and fintech operators. In our opinion, no specific legislation for FinTech companies needed, each type of activity provided by a financial or technology company is subject to a specific legislation/regulation with primary focus on services and products provided as payments, insurance, investments etc. Practical Implications: The term FinTech is freely used by policy makers, regulators, companies, researchers, academics and the public, both nationally and internationally. According to international organizations such as the IMF, the World Bank and the OECD, FinTech offers the opportunity to accelerate economic growth and expand financial affordability/inclusion in all countries. Some countries are increasingly striving to become global or international regional hubs for FinTech and are working hard to develop interagency government strategies with a supportive legal environment. Originality/Value: There is still confusion about the nature and dynamics of FinTech among politicians, scientists and practitioners, as well as about the legal framework of this area. The value of this article is to clarify and propose an apprach to definition of FinTech by combining different approaches in a very original and innovative way.peer-reviewe

Establishing regulatory sandboxes for FinTech companies in the European Union to foster the development of the FinTech Sector ? an analysis

This paper aims to find an answer to the question whether and to what extent the concept of a Regulatory Sandbox for FinTech companies should be applied at the supranational level of the European Union. In several steps the term "FinTech" will be narrowed down and its effects on the global financial sector analyzed. Afterwards, the three most common regulatory approaches are presented, whereby the Regulatory Sandbox is described in more detail using the sandbox of the Financial Conduct Authority from the United Kingdom as an example. Finally, the relevant regulatory authorities in the EU are discussed. The results make clear that the economic importance of FinTechs is increasing significantly. Considering the fact that FinTechs from Great Britain account for almost three quarters of the total market volume, it is still clear that the EU must become much more attractive in the face of the coming Brexit in order not to lose ground globally. One way to do so is to provide regulatory certainty. A regulatory sandbox is suitable for this purpose, as it reduces uncertainty for companies and makes them more attractive for investors. Regulators also benefit from receiving direct feedback on their regulatory framework and being able to adapt and develop it accordingly. It is proposed that in the run-up to a joint European sandbox, interested National States establish their own national sandboxes, whereby all of them should decide slightly differently on both the structure and the objectives. Based on the experiences of the National States, it is up to the competent authorities in the EU to prepare a supranational sandbox. When implementing the establishment of such sandbox, clear coordination and responsibility of the actors as well as the assumed demand and potential problems have to be considered carefully

The Legal Experiment: The Concept and Its Norms, the Importance of the Improvement Ijokorligi Institute

This article describes the process of rulemaking and legal classification of the rolan the experiment in the light of national and international experience. The article for conclusions and recommendations set out the legal experiment. The article also gives an idea of the relative proportions of the legal and regulatory sandbox experiment. Foreign experience on the concepts highway has also been studied

Building Fintech Ecosystems: Regulatory Sandboxes, Innovation Hubs and Beyond

Around the world, regulators and policymakers are working to support the development of financial technology (FinTech) ecosystems. As one example, more than fifty jurisdictions have now established or announced “financial regulatory sandboxes.” Others have announced or established “innovation hubs,” sometimes incorporating a regulatory sandbox as one element. This article argues that innovation hubs provide all the benefits that the policy discussion associates with regulatory sandboxes, while avoiding most downsides of regulatory sandboxes, and that many benefits typically attributed to sandboxes are the result of inconsistent terminology, and actually accrue from the work of innovation hubs. The paper presents, as the first contribution of its kind, data on regulatory sandboxes and innovation hubs and argues that the data so far available on sandboxes does not justify the statement that regulatory sandboxes are the most effective approach to building FinTech ecosystems. Given that regulatory sandboxes require significant financial contributions, sometimes new legislation, and intense regulatory risk management, and that they do not work as well on a stand-alone basis (i.e. without an innovation hub), while innovation hubs alone can provide more significant benefits in support the development of a FinTech ecosystem, regulators should focus their resources on developing effective innovation hubs, including, in appropriate cases, a sandbox as one possible element

Harmonisasi Kewenangan Bank Indonesia dan Otoritas Jasa Keuangan Terkait Penerapan Regulatory Sandbox dalam Inovasi Berbasis Fintech di Indonesia

The progress of technological innovation in the era of globalization was so quickly. The digital technologi gives special colour in the financial business sector. During the pandemic, a lot of people switch use online transactions because of the implementation of restrictions community activities system applicate by the government. Behind the high growth graph, it turns out that in practice financial tecnology (fintech) are reaping various polemics in the community. The lack of knowledge of digital financial literacy has resulted in many citizens being entangled in the dynamics of illegal fintech lending cases. The fintech requires Bank Indonesia and the Financial Services Authority carry out intensive supervision of the legality of digital financial innovation companies through the Regulatory Sandbox mechanism. This article uses normative legal research as a reference basis in determining legal procedures related to the polemic of Fintech-based innovation companies in Indonesia. The analytical method used is qualitative and described descriptively. The results of this study are to find out the harmonization of BI and OJK authorities through the implementation of the Regulatory Sandbox mechanism by establishing PBI No.19 /12 /PBI /2017 and POJK No. 13/ POJK.02/ 2018 as the legal basis for the legalization of fintech innovations before they are widely circulated in the community

Keeping up with Innovation: Designing a European Sandbox for Fintech. CEPS ECMI Commentary no 58 | January 2019

In the aftermath of the 2007-09 global financial crisis, regulators in all major jurisdictions introduced significant new requirements for financial firms. Certainly justified in purpose, these regulations have increased market barriers, both directly through specific obligations, and indirectly through the sheer magnitude and complexity they involve. Regulators primarily focused on bolstering financial stability and consumer protection, while frequently disregarding their objective of promoting financial innovation. Ten years after the crisis, we believe that it is time to reconsider the appropriate balance between those objectives. In this commentary, we show how EU financial regulation may stifle the innovation of financial services. We use the example of automated investment advice, so-called ‘robo-advisors’, and we show how a proper balance between regulatory objectives could be achieved through establishing a ‘guided’ regulatory sandbox