The upcoming regulation, which would be launched before mid-year, would be a kind of umbrella policy as it would cover various types of fintech businesses, said Sukarela Batunanggar, the deputy commissioner for the OJK Institute, a research center under the financial regulator.

Among the major types of fintech businesses included in the proposed policy are those involved in peer-to-peer (P2P) lending, investment and payments.

“This policy package will contain all principles and basic regulations on fintech and other digital financial service providers, including incumbents, like banks,” he said.

“It aims to discipline the market and create a responsible ecosystem of digital finance business that is not harmful to customers.”

Several aspects in the pipeline of the upcoming policy include good governance, transparency, customer protection and data confidentiality of fintech and digital financial providers.

The proposed policy will complete OJK’s regulation on peer-to-peer lending players, in which there is a stipulation on how they should run their businesses.

The prevailing regulation on peer-to-peer lending, POJK No. 77/2016, requires a fintech company to have Rp 1 billion (US$70,000) in capital when registering its business with the OJK. The amount increases to Rp 2.5 billion when a company applies for a business license.

In the next package, the OJK would focus more on customer protection and risk mitigation, Sukarela said.

Fithri Hadi, the OJK director of digital finance innovation and micro-finance development, said the upcoming regulation aimed to prevent the establishment of fintech firms or digital financial services that could harm customers by charging high interest rates.

He claimed the OJK had found in its survey that there were still players that charged high interest rates. The OJK, he added, wanted to protect Indonesia’s fledgling fintech industry “from the harms by one or a few irresponsible parties that affect how people see the industry collectively”.

Previously, executives of P2P lending fintech firms voiced their concerns about a statement from OJK chairman Wimboh Santoso, who reportedly said that P2P lending platforms were “similar to loan sharks” because they charged their customers high-level, double-digit lending rates.

However, fintech players argued that high-level interest rates were common for any source of funds with risks higher than regular loans as P2P lending platforms did not require collateral, unlike conventional banks.

In an effort to draw up a comprehensive regulation, the OJK developed a “regulatory sandbox”, a special medium for fintech companies to develop and test their products and reference point for regulation in the industry.

Fintech players responded positively to the OJK’s proposed policy.

Calindra da Cunha, the operation director of electronic payment service provider TrueMoney Indonesia, for example, said a comprehensive regulation on fintech was needed to discipline the fintech industry, which was flourishing and growing.

“Nowadays, people can easily claim they own a fintech [business]. They have platforms for fintech, but we do not know whether it is a good one or irresponsible one,” he said.

Meanwhile, Dipo Satria Ramli, the director of DANAdidik, which uses crowdfunding to provide student loans, saw the upcoming regulation as a challenge for the company to perform better, particularly in customer protection.

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