Fintech in Indonesia – AI and Distributed Ledger Technology

Presently, there is no specific law or regulation in Indonesia that addresses the use of artificial intelligence, including robo-advice. However, artificial intelligence is mentioned in Financial Services Authority (OJK) Regulation No. 13/POJK.02/2018, dated 16 August 2018, regarding Digital Financial Innovation in the Financial Services Sector as one of the examples of digital financial innovation in the category of market support.

Other examples of market support include artificial intelligence or machine learning, machine-readable news, big data, social sentiment, market information platform, and automated data collection and analysis.

Robo-advice is also referred to in this OJK Regulation as a type of other digital finance supporting activity. Other examples include social and eco-crowdfunding, Islamic digital financing, e-waqf, e-zakat, robo-advice and credit scoring. The regulation is silent on any specific provisions for artificial intelligence and robo-advice. Therefore, the principles and provisions under OJK Regulation No. 13/POJK.02/2018 is generally applicable to artificial intelligence and robo-advice used in the fintech sector in Indonesia.

Distributed Ledger Technology

There is no specific rule or regulation governing the use of distributed ledger technology or blockchains. Blockchain and distributed ledger technology is referred to in Bank Indonesia Regulation No. 19/12/PBI/2017 regarding the Organization of Financial Technology, dated 30 November 2017.

The regulation refers to blockchain and distributed ledgers as one of the recognized examples of fintech activities within the payment system category. Payment system activities include authorization, clearing, final settlement and implementation of payments, with examples such as blockchain or distributed ledgers for the provision of fund transfers, electronic money, electronic wallets and mobile payments.

The regulation is silent on any specific provisions for artificial intelligence and robo-advice; therefore, the principles and provisions under Bank Indonesia Regulation No. 19/12/PBI/2017 is generally applicable to blockchain and distributed ledgers used in the fintech industry in Indonesia.

From the perspective of financial services, under OJK Regulation No. 13/POJK.02/2018, dated 16 August 2018, regarding Digital Financial Innovation in the Financial Services Sector, blockchain and distributed ledgers are referred to as examples of other financial service activities, which include such examples as invoice trading, vouchers and products using blockchain-based applications.

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