Urgency of digital banking and digital bank regulation in improving

banking laws in Indonesia

Namanya Disini
Department of Accounting, Faculty of Economics and Business, Universitas Oray Kadut,
Bandung, Indonesia

Abstract
Purpose – The purpose of this paper is to elaborate the differences between digital banking and
digital bank, the urgency of digital banking regulation including the digital bank, and the reason
why Indonesia needs to equip with the latest banking laws and regulations.

Design/methodology/approach – This research is a normative-legal approach. Literature study

and document observation were used for data collection and data analysis.

Findings – The provisions on digital banking (including digital bank, digital branch, and fintech)
stipulated by several regulation, especially form BI and OJK can strengthen the Banking Law in
Indonesia. Digital banking, especially digital banks or digital branches, must address several
aspects of consumer protection as well as electronic information and transaction. Nevertheless,
the existing regulation only focuses on the implementation of digital banking services, so that the
explicit digital banking regulation is needed.

Research limitations/implications – Consequently, OJK needs to monitor the development of

digital banking in Indonesia so that it can make various new regulations aligned with banking
laws as a primary reference for digital banking services in Indonesia.

Practical implications – This research is expected to be useful for The House of Representatives
of the Republic of Indonesia (DPR), the Ministry of Law and Human Rights, the Indonesia
Financial Services Authority (OJK) and Bank of Indonesia (BI) in considering the actual
regulations and laws concerning Digital Banking.

Social implications – This research is expected to give further details about consumer protection
and the obligations of financial services business actors in response to the dynamic changes in
the financial services sector.

Originality/value –Regulating digital banking in the Indonesian Law is meant to give legal
certainty and better legal protection for consumers, investors and providers of digital banking
services. The provisions on digital banking can fundamentally strengthen the Banking Law in
Indonesia.

Keywords Banking law, Business law, Digital bank, Digital banking, Financial technology,
Indonesia, Law and regulation

Paper type Research paper

1. Introduction
All industries in the world have been revolutionized by technology in the era of Industry 4.0,
including the banking industry. The times have shown changes both in terms of the development
of Information Technology and changes in people's behavior patterns in using the services
provided by Financial Services Institutions. This phenomenon is currently encouraging the
emergence of new financial service actors known as Information Technology-based financial
service providers that offer new innovations in financial services.
The technological developments have brought new nuances to banking sector, especially in
the aspect of digital banking (Mbama & Ezepue, 2018). Currently, the banking industry can no
longer rely on traditional approaches but must prioritize aspects of digital technology, supported
by proper policy (Auer et al., 2020). A business organization, such as the banking sector, needs
to design and develop a focus on personalized and customized services for each customer, at
least by leveraging the internet and smartphones (Mehdiabadi et al., 2020). Digital
transformation affects end-user products and services, internal processes, and existing service
models in the financial and banking industries. As technologies develop and are implemented,
the conventional understanding of business and user interaction is changing (Hanten et al., 2022).
In essence, banking services are inevitable from the existence of digital banking.
Digital banking automates conventional banking through internet-enabled devices and digital
platforms like the web (Louw & Nieuwenhuizen, 2020). Customers can access almost all
financial services through Digital Banking at any time, regardless of national or bank holidays.
The best thing is that the customers need no more to go to the bank physically (Skinner, 2014).
The customers of digital banking may use applicable digital devices and platforms anytime,
anywhere.
Previously the banking procedure took a long time, and customers were required to preserve
physical records of their transactions or banking histories. However, the advent of digitalization
has made paperless banking a reality for everyone. Technology development has been a critical
factor in the banking industry's progress worldwide (Haralayya, 2021). In response to rising
customer expectations, banks created cutting-edge products and services to guarantee customer
satisfaction. Banking operations, products, and services have been reimagined by digital
technology. Customers may complete transactions more quickly, accurately, and conveniently.
Digital banking has changed how banks interact with their customers. The changes have brought
to light the urgent necessity for the quick adoption of digital technologies in the banking
industry.
In the banking industry in Indonesia, the terms ‘digital banking’ and ‘digital bank’ are now
emerging, which can sometimes be confusing. Referring to Law No. 10/1998 on Banking, it is
explained that banking is everything related to banks, including institutions, business activities,
and methods and processes in carrying out their business activities. Meanwhile, a bank is a
business entity that collects funds from the public in the form of savings and distributes them to
the public in credit or other forms to improve the standard of living of the people at large. From
these two meanings, the meaning of ‘banking’ and ‘bank’ is distinguished. If the differences in
both terms refer to the applicable law, then the definitions of the terms are clear. However, when
the term ‘digital’ is juxtaposed with the two terms, the real meaning is often blurred. Yet, in Law
No. 10/1998 on Banking, the terms ‘technology’, ‘digital’, and ‘digital banking’ have not
included.
In practice, when we use the term ‘digital banking’, the perception is an activity carried out
by banks to automate processes using advanced technology through ICT-based services. Through
this ICT, banks can deliver banking products and provide transactions using applications that
give users the ability to access financial data via desktop, mobile and ATM services (Wijaya,
2021). The establishment of a digital banking infrastructure based on the internet and mobile
banking is very important to improve customer relationships (S. K. Sharma et al., 2017).
In Indonesia, the implementation of digital banking services by commercial banks (as legal
entities) has been stipulated by the Regulation of Financial Services Authority (POJK) No.
12/POJK.03/2018. The commercial banks (with conventional or sharia principle), including the
digital bank, can implement the digital banking services. Refer to the POJK No.
12/POJK.03/2021 on Commercial Banks, the digital bank is one of the legal entities in
commercial banks which is providing and conducting business activities primarily through
electronic channels without a physical office other than the head office or using limited physical
offices. A digital bank can be a new bank or an old bank that is transformed into a bank with a
fully digital system.
The development of digital banking and digital bank in Indonesia is also related to the
development of financial technology (fintech). Indonesia is urgently in need of a legal
framework in the form of law because of the serious problems surrounding digital banking and
fintech and the lack of comprehensive regulation for the industry for quite some time. The
Indonesian Financial Services Authority Regulation (POJK) and Bank of Indonesia Regulation
(PBI), the current regulations and laws, only regulate technicalities of fintech and have little legal
power (Kharisma, 2020).
The urgency of regulating digital banking and digital banks, including fintech, in Indonesian
law, however, has not been specifically investigated in any study. This research will explicate the
differences between digital banking and digital bank, the urgency of digital banking regulation
including the digital bank, and the reason why Indonesia needs to equip with the latest banking
laws and regulations.

2. Literature review
Digital banking primarily involves using technology to supply banking products and services at
its core. Some people think that digital banking refers to an online or mobile platform for
banking, but genuine digital needs to go much further than that. Some advantages of a digital
transformation for banks are efficiency, cost savings, increased competitiveness, agility, and
survival (G. Sharma, 2017).
Banking has been remarkably slow to seize every technological opportunity for a sector with
such a high frequency of interactions with retail clients. Although many banking systems have
been digitalized, they still do not operate as a single digital entity as many other customer-facing
organizations do. While most banks have not yet achieved that degree of efficiency, other
industries, like the airline or logistics, rely on technology to be more efficient. Most banks
currently view digital as a valuable tool rather than the foundation upon which they should
construct their systems (Harvey, 2016).
Automating tasks, eliminating redundancies, etc., result in cost savings or reductions (Sahoo
& Swain, 2012). However, the synergies from having access to more qualitative data and quicker
response times to market changes are even more substantial advantages. Talking about the
increased competitiveness, by going digital, banks can reach a wider audience and establish a
stronger connection with the tech-savvy generations. The banks must provide services of the
same caliber if they want to compete with cutting-edge tech behemoths and fresh new fintech
start-ups (Boustani, 2020).
 The banks have also focus on agility. It is simple to train their automated functions to behave
differently and respond to changes in the market environment. For instance, risk management
became more important following the financial crisis, yet it took banks years to train and hire the
necessary number of risk specialists to adequately manage their assets. Even now, it takes banks
years to adjust to new regulatory changes, and the technological side is always the biggest issue
(Zhao et al., 2010). Finally, the banks have to focus on survival, which means with increasing
pressure from fintech firms and technology companies, banks are at last really considering a true
digital transformation. Most banks had only implemented a thin layer of digital technologies to
their front-end, customer-facing platforms up to this point, but it was insufficient. Commercial
banks will need to undergo a thorough transformation if they want to continue to exist and
compete on both costs and usability (Feyen et al., 2021).
The majority of banking procedures have been automated via digital banking. Due to digital
banking, customers can conduct transactions via desktops, laptops, tablets, and mobile phones.
Customers do not need to go to a bank branch to open a digital bank account. Additionally,
customers can set up billers and pay their utility bills online. Using digital banking, customers
can access their bank accounts from any location at any time.
The development of digital banking can be seen from three perspectives: customer, investor,
and the bank itself (Lipton et al., 2016). A holistic, interactive, and intuitive overview of the
customers' finances and, more generally, their financial lives, including details on their current
account and deposit balances, transactions, unpaid loans, recurring payments, pension
contributions, and accumulation, as well as securities accounts, is offered by digital banking
from the perspective of the customers. Digital banking has to do with end-to-end digital that
provides a holistic, fully digital experience for customers, including paperless application and
passing the ‘Know Your Client’ process. It also has to do with mobile-first that enables natively
driven mobile e-payment solutions, including domestic and international payments and
remittances, automatic bill payments, and peer-to-peer (P2P) payments and money transfers. In
sum, digital banking must equip the customers with the features such as foreign exchange,
biometrics, e-credit card, and access to P2P World.
The digital banking, of course, has some features and benefits for the customers. Digital
banking services allow customers to perform transactions from anywhere globally, unlike
traditional banking, which necessitates a trip to the bank for every transaction, large and small
(Chen et al., 2017). Customers can execute banking tasks from the convenience of their homes
with the help of digital banking. With 24-hour access to its features, digital banking enables
users to do banking operations at all times. The introduction of digital banking has resulted in
less paperwork for bank staff. Customers can now access records from anywhere, and banking is
now paperless. All utility bills, including those for gas, electricity, phones, and other services,
can be paid with a single click. The consumer can receive notifications of approaching due dates
and past-due amounts. Online banking can also use the auto-debit feature to pay bills
automatically (Haralayya, 2021). Besides that, online payments have greatly benefited from
internet banking. Since payment gateways are connected with online shopping portals, online
shopping is more straightforward. Digital financial services are spreading in rural places thanks
to the affordable price of smartphones and easy access to the internet, which brings holistic
development one step closer. Fund transfers offered by digital banking lessen the risk of fake
money. Because banking has become more affordable through digitalization, it saves time,
resources, and labor. Banks now operate more effectively and with a broader community.
 To regulate the implementation of digital banking services by commercial banks in
Indonesia, at least the Financial Services Authority (OJK) has stipulated this regulation
(Regulation No. 12/POJK.03/2018). Regulatory and supervision authority over digital banking
and fintech activities is vested in the Indonesia Financial Services Authority (OJK) under Law
No. 21/2011. Due to the control of BI over a payment system and financial transactions, Law No.
6/2009 also grants the institution the authority to regulate fintech, specifically digital payments.
Table 1 presents some of the existing regulations on digital banking in Indonesia.

Table 1 Existing regulation on digital banking in Indonesia

No. Existing regulation
1. PBI No.19/12/PBI/2017 on the
Implementation of Financial
Technology
2. PBI No. 20/6/PBI/2018 on
Electronic Money
3. POJK No. 12/POJK.03/2018 on
Implementation of Digital
Banking Services by
Commercial Banks
4. Law No. 11/2008 on Electronic
Information and Transactions,
amended by Law No. 19/2016
5. POJK No. 13/POJK.02/2018 on
Digital Financial Innovation in
the Financial Services Sector
Objectives
Regulates Fintech execution,
particularly in terms of providing
payment system services
Regulates the administration of
electronic money as a means of
non-cash transactions
Regulates the implementation of
digital banking service by
commercial banks
Was passed on April 21, 2008,
and became the first cyber law in
Indonesia
Regulates various types of
digital financial innovation
(IKD) in general
Contents
purpose and scope;
registration;
regulatory sandbox;
permits and approvals;
monitoring and supervision;
cooperation between payment
system service providers and
financial technology
operators;
coordination and cooperation;
and penalty.
Licensing electronic money
administration; reporting and
monitoring
general requirements;
electronic banking services;
digital banking services;
implementation of electronic
banking services or digital
banking services;
customer protection;
reporting;
other provisions;
penalty; and
transition conditions.
recognition of information
and/or electronic documents
as valid legal evidence
recognition of electronic
signatures
electronic certification
administration
electronic system operation
domain name
intellectual property rights and
protection of personal rights
prohibited acts and their criminal
provisions
form of legal entity and
organizer records;
regulatory sandbox;
registration of IKD organizers;
monitoring;
reporting;
No. Existing regulation
6. POJK No. 12/POJK.03/2021 on
Commercial Banks
7. POJK No. 12/POJK.03/2021 on
Product Operation of
Commercial Bank
Objectives
Regulates the basic of
commercial banks
Regulates the specific product
operations of commercial banks
Contents
governance;
data center;
data protection and
confidentiality; and
consumer education and
protection
general requirement;
corporate plans;
establishment of an Indonesian
legal entity bank (BHI);
digital banks;
ownership and change of capital
of bank BHI;
directors, board of
commissioners, and executive
officers of the bank;
bank office;
change of name and logo;
changes in business activities
and articles of association;
changes in the form of the bank's
legal entity;
head office overseas;
revocation of business license;
banking synergy;
submission of permits and
reports;
bank grouping; and
miscellaneous terms and
transitional terms.
definition and classification of
Bank Products;
criteria for Bank Products that
require a license (i.e. new
Bank Products);
submission of Bank Product
Implementation Plan (RPPB);
obligation to determine policies
and procedures for the
operation of Bank Products;
aspects that need to be
considered in the operation of
Bank Products;
mechanism for administering
new Bank Products (permitted
process);
termination of Bank Products;
reporting;
fulfillment of consumer
protection principles and/or
sharia principles;
mechanism for organizing
activities for the Bank's own
interest; and
 No. Existing regulation Objectives Contents
transition.

3. Method
This research is a normative-legal approach. A legal basis for this research can be found in:
 The 1945 Constitution of the Republic of Indonesia (UUD NKRI 1945);
 Law No. 10/1998 on Banking (Amendment to Law No 7/1992 on Banking);
 Law No. 8/1999 on Consumer Protection;
 Law No. 11/2008 on Electronic Information and Transactions, amended in Law No.
19/2016;
 Law No. 21/2011 on the Indonesia Financial Services Authority (OJK);
 Government Regulation No. 71/2019 on the Implementation of Electronic Systems and
Transactions (PTSE); and several other PBI and POJK on Fintech;
 Regulation of Financial Services Authority (POJK) No. 12/POJK.03/2018 on
Implementation of Digital Banking Services by Commercial Banks;
 Regulation of Financial Services Authority (POJK) No. 12/POJK.03/2021 on
Commercial Banks.
 Regulation of Financial Services Authority (POJK) No. 13/POJK.03/2021 on Product
Operation of Commercial Bank

Literature study and document observation were used for data collection. Researchers seek to
describe certain features, characteristics, or factors of a population or region systematically,
accurately, and factually. Legal interpretation, reasoning, and argumentation are used in this
qualitative juridical analysis.

4. Results and discussion

4.1. Digital Banking and Digital Bank
The development of information technology has caused an evolution leading to digital banking
services (Melnychenko et al., 2020). This service aims to improve the efficiency of operational
activities and the quality of bank services to its customers (Hadid et al., 2020). For this reason,
commercial banks need to develop business strategies that lead to digital banking services.
Digital banking services are banking services or activities using electronic or digital facilities
owned by the banks, through digital media belonging to prospective customers or bank
customers, carried out independently (Kaur et al., 2021). These services allow prospective
customers and Bank customers to obtain information, communicate, register, open accounts,
banking transactions, and close accounts, including obtaining other information and transactions
outside of banking products, including financial advisory, investment, electronic-based trading
system transactions (e-commerce), and different needs of the bank’s customers.
Business strategy development that leads to digital banking services requires adequate
infrastructures (Nadeem et al., 2018). The infrastructures include risk management, information
technology adjustments, business models, business processes, internal control, and human
resources to support the convenience, security, and reliability of digital banking services in
providing information, communication, registration, account opening, and transaction
processing, as well as account closing.
As mentioned before, a digital bank can be a new bank or an old bank that is transformed
into a bank with a fully digital banking system. The presence of a digital bank is said to be the
first milestone in changing the banking structure in Indonesia. Referring to the Regulation of the
Financial Services Authority (OJK) No. 12/POJK.03/2021 on Commercial Banks, the definition
of a digital bank is considered different from digital bank services. Digital banks are actors in
banking practices that are entirely carried out using online devices. The existing digital banks in
Indonesia (top 10) are Jago by Bank Jago, Jenius by Bank BPTN, Digibank by Bank DBS,
TMRW by UOB, Bank Raya by Bank BRI, Blu by BCA, Allo Bank, Line Bank by Hana Bank,
D-Save by Bank Danamon, and WOKEE by Bukopin.
A digital bank is a business organization that offers online banking activities that previously
were only available at bank branch offices (Sajić et al., 2017). In another context, digital banks
must be able to automate the delivery of new and traditional banking products and services
directly to customers through interactive electronic communication channels. The service does
not always have to exist in a physical form like a bank office or a particular location. Perhaps it
can be interpreted as a form of branchless or office-less (Rahayu et al., 2020). However, this
does not mean that the bank does not need a physical office building.
Digital banks can provide convenient and innovative products and services and impact the
banking sector (Jünger & Mietzner, 2020). With the acceleration of digital transformation and
increasing competition, the existence of digital banks is becoming more strategic and innovative
to continue to succeed. This can also be another reference that there is indeed a difference
between digital banking and digital banking.
The branchless, office-less, or physical-less indicators are part of the main characteristics of
digital banks. The logic is that digital banks will be more efficient because they do not need to
pay additional fees for the existence of physical branch offices and employees (Mamadiyarov,
2020). With automation in various processes, they can streamline operational processes and
reduce costs. With this cost savings, banks can provide higher deposit interest rates and, on the
other hand, lower interest rates for loans. Another thing that digital banks can do is offer deposit
account openings with no minimum quantity or adopt a different approach to credit risk
assessment.
Another thing that will become attached to digital banks is that they will become very
dependent on technology. Through modern technology, digital banks can offer services that are
more personalized with the data they have (Melnychenko et al., 2020). With the help of artificial
intelligence technology (AI), it will make it easier for digital banks to analyze customer data
quickly. Digital banks can also do things through AI that will be able to design products and
services that are by the characteristics of their customers. Digital banks will become faster and
more responsive and avoid the old bureaucracy in decision-making (Chavan, 2013).
To avoid misunderstanding in terms of ‘digital banking’ and ‘digital bank’, OJK uses the
term ‘digital branch’ instead of ‘digital bank’ to accommodate bank facilities that function
specifically to process customer registration and account opening independently. In short, the
development of digital banking services is driven by (1) the rapid development of information
technology; (2) changes in people's lifestyles according to the development of information
technology; (3) public need for banking services that are effective, efficient, accessible from
anywhere and anytime, comprehensively, and easily; (4) competition in the banking industry to
provide services according to the needs of the community; and (5) banking needs efficient and
integrated operations.
The implementation of digital branches can be through the provision of several types of
digital media in specific areas in the bank's office network or other locations, which can be used
independently by prospective customers and customers of digital banking services without
involving bank employees. The implementation of digital branches must pay attention to the
bank's prudential principles, the principles of IT security, integration of IT systems, cost-
effectiveness, and adequate customer protection, as well as in line with the bank's business
strategy.

4.2. Urgency of Digital Banking Regulation

The urgency of digital banking regulation comes from several aspects. The banking industry has
benefited greatly from the implementation of digital banking. First, digital banking is believed to
increase efficiency by using the latest applied technology in running its business. The reason is
very reasonable because banking as part of the financial industry has a large volume of
interaction with retail customers (Larsson & Viitaoja, 2017). Traditional banks have not taken
advantage of every new business opportunity due to technological problems (Larsson & Viitaoja,
2017). Nevertheless, digital banking systems do not yet function as digital entities, as has
happened in many entities that deal directly with customers.
Second, because it can increase efficiency, digital banking services are cost-effective (Gupta
& Bansal, 2018). Banks can increase operating margins of financial benchmarks in the income
before tax. In banks that want to make efficiency and savings, around 40 percent switch to digital
banking. Of course, the benefits are not only cost savings from automating functions and
eliminating redundancy. The best advantage is the synergies in terms of access to data and faster
response times.
Third, one of the characteristics of successful digital banking is increasing competitiveness
(Kolodiziev et al., 2021). The use of digital technology provides a substantial opportunity for
banks to reach a broad customer base and build closer relationships with the tech-savvy
generation. Of course, there will be consequences when the fintech circles present are
everywhere. Thus, if the bank dares to compete with the modern era technology giants (fintech),
then the bank must be able to offer minimal services with the same level of quality.
Fourth, when banks wholly use digital platforms, their customers must benefit that they do
not switch to non-banks (Sikdar & Makkad, 2015). At least there is no longer a barrier to the
need for physical documentation or manual approval. Customers do not need to be physically
present or come to the branch office and submit documents or put a signature.
The existing regulation focuses on the implementation of digital banking services. What is
meant by digital banking services is electronic banking services (Hoehle et al., 2012), developed
by optimizing the utilization of customer data to serve customers more quickly, plainly, and
according to customer experience, and can be entirely carried out by customers independently,
considering security aspects (Pazarbasioglu et al., 2020).
The implementation of Digital Banking Services has been regulated in the Financial Services
Authority Regulation No. 12/POJK.03/2018 concerning the Implementation of Digital Banking
Services by Commercial Banks (POJK Digital Banking Services). This research at least confirms
the urgency of digital banking, including digital banking, in enriching previous regulations
related to digital banking. Meanwhile, digital financial services are payment systems and
financial service activities carried out by issuers in collaboration with third parties and using
mobile-based and web-based technology facilities and devices for inclusive finance. The
implementation of Digital Financial Services has been regulated in Bank Indonesia Regulation
No. 20/6/PBI/2018 concerning Electronic Money.
The latest regulations regarding digital banking (including digital bank, digital branch, and
fintech) must consider: (1) the development of technology and information systems continues to
produce various innovations related to financial technology; (2) the development of financial
technology, on the one hand, brings benefits, but on the other hand, has potential risks; (3) the
financial technology ecosystem needs to be continuously monitored and developed to support the
creation of monetary stability, financial system stability, as well as an efficient, smooth, safe, and
reliable payment system to support sustainable and inclusive national economic growth; (4) the
implementation of financial technology must apply the principles of consumer protection as well
as risk and prudent management; and (5) Bank Indonesia's policy response to the development of
financial technology must remain in sync, harmonious, and integrated with other policies issued
by Bank Indonesia.
Digital banking criteria need to include: (1) innovativeness; (2) impact on existing products,
services, technology, and/or financial business models; (3) providing benefits to the community;
(4) widely usage; and (5) other criteria set by Bank of Indonesia. Implementation of digital
banking by commercial banking must also: apply the principle of consumer protection; maintain
the confidentiality of consumer data and/or information including transaction data and/or
information; apply the principles of risk management and prudence; use rupiah in every
transaction conducted within the territory of the Unitary State of the Republic of Indonesia in
accordance with the provisions of the laws and regulations governing currency; apply the
principles of anti-money laundering and the prevention of the financing of terrorism; and comply
with the provisions of other laws and regulations.
Consumer protection in the financial services sector has been regulated in POJK No.
1/POJK.07/2013. In line with the development of digital technology, OJK continues to
strengthen efforts to protect consumers in the financial services sector through the issuance of
Financial Services Authority Regulation (POJK) No. 6/POJK.07/2022 concerning Consumer and
Community Protection in the Financial Services Sector. This provision regulates the application
of consumer protection by the financial services industry in product planning, service, and
dispute resolution. In addition, this POJK clarifies the obligations of the principle of openness
and transparency of product and service information as well as increasing the protection of
consumer data and information. This provision further strengthens the regulation on consumer
protection and the obligations of financial services business actors in response to the dynamic
changes in the financial services sector. Strengthening consumer and public protection in the
financial services sector is urgently needed to adapt to the rapid and dynamic development of
innovation and technology in the financial services sector, as well as efforts to improve the
implementation of consumer protection by financial services business actors.
Substances of improvement to strengthen consumer and public protection covered in POJK
No. 6/POJK.07/2022 include:
 A regulatory approach to the product and or service life cycle that further optimizes
efforts to protect consumers and the public from product and or service design to dispute
handling and resolution;
 Strengthening the principle of consumer and public protection, among others, requires
business actors to carry out “adequate education” to increase the ability of consumers and
the public to choose products and services in the financial services sector;
 Strengthening the application of the principle of openness and transparency of
information through the arrangement of forms, procedures, and exceptions for the
submission of summary information on products and services;
 Strengthening support for consumers and/or people with disabilities and the elderly, as
well as increasing the protection of consumer data and information;
  The obligation to provide sufficient time for consumers to understand the agreement
before signing or a pause after signing the agreement for products and services that have
a long and or complex nature;
 Obligation to record if the product and or service offerings are made through personal
communication facilities by voice and or video;
 Confirmation of OJK's authority in protecting consumers, including monitoring of market
conduct as a form of implementation of articles 28 to 30 of the OJK Law;
 Obligation to establish a unit or function of consumer and community protection;
 Obligation to submit self-assessment reports by business actors to OJK regarding
compliance with consumer protection provisions.

In addition, the implementation of digital banking regulation must connect with the law of
electronic information and transaction, especially in processing electronic information as a set of
electronic data, including but not limited to writing, sound, images, maps, designs, photographs,
electronic data interchange (EDI), electronic mail, telegram, telex, telecopy or the like, letters,
processed signs, numbers, access codes, symbols, or perforations that have meaning and
understandable. As in the digital banking, electronic transactions are legal actions carried out
using computers, computer networks, and/or other electronic devices. It also includes the
information technology as a technique for collecting, preparing, storing, processing, publishing,
analyzing and/or disseminating information. Digital banking must comply with electronic
documents as any electronic information created, transmitted, sent, received, or stored in analog,
digital, electromagnetic, optical, or similar forms, which can be seen, displayed, and/or heard
through a computer or electronic system.
Thus, the proper implementation of consumer protection regulation and the law of electronic
information and transaction can enhance the appropriate execution of digital banking regulation
and other relevant regulations. Since the existing regulation only focuses on implementing
digital banking services, specific and explicit ‘digital banking regulation’ in Indonesia is urgently
needed.

5. Conclusion and recommendation

The provisions on digital banking (including digital bank, digital branch, and fintech) has been
stipulated by several regulation, especially form BI and OJK. These regulations can strengthen
the Banking Law in Indonesia. Nevertheless, several aspects of consumer protection as well as
electronic information and transaction in digital banking, especially in digital banks or digital
branches, must be addressed in a specific and explicit digital banking regulation. In this sense,
OJK must continue to monitor the development of digital banking so that it can evaluate the
problem and issue various new regulations that can accommodate certain aspects of digital
banking services in Indonesia in line with banking laws as the primary reference.

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