Digital Financial Innovation and Its Security Assurance that Must Be Understood
Have you ever felt that in recent years, everything related to finance has been digitized? You can save and/or invest digitally. You can also perform many transactions at once just by using a smartphone from anywhere. All of these are some of the great benefits of the emergence of Digital Financial Innovation, also known as DFI.
However, many still consider digital processes to carry a significant risk of hacking. Yet, if you use trusted tools or applications, these risks can be minimized. Moreover, with the security assurance from the Financial Services Authority (OJK) in each usage, these concerns can be addressed. Let's delve into the details of digital financial innovation below.
Digital Financial Innovation and OJK
Before understanding DFI, let's get acquainted with the Financial Services Authority. OJK itself is an institution that oversees an integrated regulatory and supervisory system for all activities in the financial services sector. Explained further, OJK regulates financial services activities in banking, capital markets, insurance management, pension funds, financial institutions, and others. By the end of 2019, there were already 61 officially registered DFI providers under OJK.
In OJK Regulation number 13/POJK.02/2018, Digital Financial Innovation (DFI) is defined as activities that provide new added value to the financial services sector and involve digital ecosystems in their implementation. DFI activities can include business process updates, business models, and financial instruments. The forms of DFI vary, whether they come from limited liability companies (PT) or cooperatives.
The journey of DFI history itself is quite long and closely related to the development of financial technology or often referred to as fintech. Starting from the invention of ATMs, financial calculators, and so on, which continuously advance the financial sector. Until now, startups and various application forms are emerging, bringing more benefits to Indonesian society in terms of finance.
Various Scope of DFI Activities
Although DFI activities are related to financial services, OJK has established the scope it covers. Does any of your business plans fall under the list below?
Transaction settlement
Capital gathering
Investment management
Fund gathering and distribution
Insurance
Market support
Other digital financial support
Security Assurance Using DFI
Unfortunately, the development of DFI also brings weaknesses due to society's unreadiness for this progress. One significant challenge faced is the possibility of cyber risks and customer data breaches. Many people fall victim to illegal investments, online loans, and so on.
However, if we can be more diligent in examining what is offered, DFI brings many benefits. People will find it easier to invest, more individuals will be capable of managing their finances and assets, and there are still many more benefits of DFI in daily life.
Therefore, OJK is present as the official entity granting legal permission to all DFIs in Indonesia. OJK has the authority to supervise all forms of DFI to ensure that their implementation does not harm the public. One form of supervision is by providing a special logo indicating that a DFI has obtained permission from OJK. Therefore, register your financial company or cooperative now. Below is an easy way to apply for DFI licensing from OJK.
How to Apply for DFI Licensing to OJK
There are 2 major stages that startups or DFIs must go through before actually applying for a license from OJK. First, register with OJK and apply for Regulatory Sandbox testing. Second, undergo the regulatory sandbox for several months to a year. If the company passes or receives a "Recommended" predicate, you can apply for registration and licensing.
To carry out the first stage, you can register your DFI through https://www.ojk.go.id/GESIT/Reservasi/Create. You can even consult your business model with OJK. Remember, all processes followed by DFI Providers to obtain this license are free. In other words, OJK does not charge any fees to applicants.
Some documents you need to prepare before applying for licensing are as follows:
Act of establishment of the legal entity or cooperative.
Personal data of administrators, such as ID cards.
Brief product description.
Information and supporting data related to DFI activities.
Business plan.
For information regarding the registration process, licensing, and others, you can view it on the official OJK page, https://www.ojk.go.id/id/.
Innovating in finance must ensure its security. Because almost everyone agrees that losing money is not a trivial matter regardless of the amount. Therefore, security issues for creators of Digital Financial Innovations need to be considered. One party with a strong financial security solution is Brick. From owner and recipient data security to transaction security. Implement a secure financial system with Brick.