|President Joko Widodo and Finance Minister Sri Mulyani Indrawati observe a digital panel display during the Fintech Festival in Jakarta on Aug. 30.(tempo.co/File)|
The central bank will launch a financial technology (fintech) office next month, one that would be designated to facilitate fintech players to build networks and innovate.
The financial office will oversee the 'regulatory sandbox', a space where startups can test their services before launching them for consumers. The sandbox concept has been adopted in many countries to foster the booming fintech industry.
"Next month we will launch a fintech office. BI will establish a special task force that will coordinate with other fintech offices," Bank Indonesia (BI) deputy governor Ronald Waas said in Semarang on Saturday.
A sandbox is used by business players to test innovative products or business models. It is a tool for regulators to facilitate innovation and to test policies slated to be issued.
Earlier, BI and the Finance Services Authority (OJK) unveiled plans to issue rules by the end of 2017 to regulate fintech players' activities so they could operate safely as the burgeoning industry has facilitated an estimated Rp 40 trillion (US$3.04 billion) in transactions over the past two years.
The plan comes as fintech startups involved in payment services have begun to mushroom in Indonesia, offering e-wallets, online payment services and interbank transactions free of charge.
The international Financial Stability Board divided fintech into four categories according to innovation type, namely payments, clearing and settlement; deposits, loans and capital raising, investment and risk management and market provisioning.