Fintech Licensing Requirements in Indonesia

In general, all parties that conduct business activities in Indonesia are subject to licensing and registration requirements under the authority of the Ministry of Investment / Indonesian Investment Coordinating Board. For businesses in the financial sector, there are additional specific licensing requirements under the authority of Indonesia’s central bank, Bank Indonesia (BI), and the Financial Services Authority (OJK), depending on the scope of business activities in which a company engages.

With regard to innovations within the fintech sector, Law No. 4 of 2023 regarding the Development and Strengthening of the Financial Sector (the P2SK Law) provides a broad scope of technology innovations that fall under the cluster of Technological Innovation in the Financial Sector (ITSK). ITSK activities are subject to licensing requirements under the supervisory authority of both the OJK and BI, depending on the specific ITSK activity.

In February 2024, the OJK issued OJK Regulation No. 3 of 2024 regarding the Implementation of ITSK (OJK Reg. 3/2024), providing a new licensing regime for business activities connected to technological innovations in the financial sector. Pursuant to OJK Reg. 3/2024, the following ITSK activities fall under the jurisdiction of the OJK:

• transaction settlement activities for securities transactions relating to the clearing, settlement, recording and custody of financial instruments in the money market, foreign exchange market, and capital market;
• capital raising activities, including equity crowdfunding and smart contracts;
• investment management activities utilizing advanced algorithms, which include robo-advisory services, digital financial planning services and retail algorithmic trading;
• risk management activities related to product development and underwriting;
• fundraising and fund disbursement activities like peer-to-peer lending and financing agents;
• market support activities, including credit scoring, aggregator, and e-know your customer utilizing technologies such as AI and big data;
• activities related to digital financial assets such as cryptoassets; and
• other digital finance activities such as Islamic digital financing, invoice trading and blockchain-based applications.

ITSK activities that fall under the jurisdiction of BI are technological innovations utilized in payment systems, specifically in the processing of payment transactions (i.e., the pre-transaction, initiation, authorization, clearing, final settlement and post-transaction stages of payment transactions).

However, BI is yet to issue an implementing regulation specifically regulating these ITSK activities. Nevertheless, companies engaged in ITSK activities related to payment systems will be subject to the current legal framework and licensing regime for payment systems under BI regulations.

Foreign organizers of trade through an electronic system, namely, any business practitioner that provides electronic communication facilities used in trade transactions and operates from outside Indonesia and meets certain criteria, shall be required to appoint a representative in Indonesia and consequently must have a foreign trade company representative office in the country.

Excerpted from Lexology Panoramic: Fintech 2025, published by Law Business Research.

Find the Indonesia chapter of Lexology Panoramic: Fintech 2025 here.

Further reading:

Regulating the Promotion or Use of Cryptoassets in Indonesia

New OJK Regulation on Technological Innovation in Indonesia’s Financial Sector

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