TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsWhen data flows, can banking supervision follow?
Cross-border data flows raise the question whether the authority that sustains safety and soundness remains fully enforceable once the relevant information is placed in another jurisdiction.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A woman stands in front of an ATM on Jan. 11 inside a shopping mall in East Jakarta. (JP/Iqro Rinaldi)
D
ata now moves across borders with a speed that financial regulation was never designed to accommodate. In most sectors, this is a question of efficiency. In banking, it is a question of whether supervision, as the instrument that sustains stability, can still be exercised with full legal effect.
That is the institutional issue embedded in Indonesia’s latest trade agreement with the United States. The public discussion has focused on tariffs and market access. Yet the more consequential commitment lies in guaranteeing legal certainty for cross-border data transfers. Once it becomes a trade obligation, the matter shifts from digital commerce to supervisory reach.
The agreement requires Indonesia to provide certainty regarding the ability to move personal data out of Indonesia to the US. It should be done by recognizing the US as a country or jurisdiction that provides adequate data protection under Indonesia’s law.
In most industries, such a commitment concerns digital trade. In banking it directly affects how supervision is exercised.
Banking is a prudentially regulated system whose survival depends on continuous oversight, with information at its core. It is the authority’s ability to obtain accurate, timely and complete data on the condition of institutions under its jurisdiction.
Moreover, secrecy in banking is a prudential mechanism. It sustains depositor confidence and allows early supervisory intervention when risks accumulate. Without the assurance that financial information remains confidential, trust in the system on which the entire banking system depends weakens.
From this perspective, cross-border data flows raise the question whether the authority that sustains safety and soundness remains fully enforceable once the relevant information is placed in another jurisdiction.
