Advances in financial technology (fintech) have transformed the way people access and manage money. Now, almost all financial activities, from saving and investing to borrowing, can be done simply through a mobile phone. However, behind this convenience, new risks have emerged, such as digital fraud, misuse of personal data, and illegal services that can ensnare consumers. This is why financial regulation is crucial in the digital age.
Financial regulation serves as a protective shield for consumers. Without clear regulations, anyone can easily launch digital financial products or services without adequate oversight. This has the potential to harm users, especially those without strong financial literacy. According to the Financial Services Authority (OJK), many people are still trapped in illegal fintech lending practices, tempted by offers of quick and easy access without understanding the risks.
Through regulation, the government can ensure that every fintech company, digital bank, and other financial service provider adheres to security and transparency standards. For example, the Financial Services Authority (OJK) has implemented Regulation No. 10 of 2022 concerning Information Technology-Based Joint Funding Services (LPBBTI), which regulates consumer protection, loan interest limits, and fee transparency. Meanwhile, Bank Indonesia has also strengthened policies related to digital payment systems, such as QRIS and BI-Fast, to maintain the stability and security of non-cash transactions.
In addition to protecting consumers from potential fraud, regulation also creates a healthy business climate. With clear regulations, fintech companies have definite guidelines for implementing innovation. This helps increase public trust and encourages sustainable growth in the digital economy.
For the public, understanding the importance of financial regulation is tantamount to understanding the rights and obligations of users. Before using any digital financial service, ensure the institution is registered and supervised by the OJK or another official authority. This small step can make a big difference between financial security and the risk of loss.
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