No words yet on the exact number, but the proposal is based on the concern of “how to ensure it doesn’t harm customers”
Indonesian Financial Service Authority (OJK) is looking forward to set a minimum capital requirement for fintech startups to operate in the country, as reported by Neraca.
The institution have not set up a timeline or a mechanism for the new proposal yet, but Firdaus Djaelani, Executive Head of Non-Bank Financial Industry Supervisory Board of OJK, indicated that the minimum amount will not be “too high.”
This is considering the fact that most fintech startups are self-funded and do not fall into deposit taker category.
“We will start easy, then we will increase the amount [of required minimum capital] as we go along. All that matters is that, our concern is how to ensure that it doesn’t harm customers,” he said.
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One of the aspects that will determine the exact requirement is server utility and office rental for these startups, which will impact the amount of minimum capital requirement.
Djaelani also stressed the importance of setting up a custodian agency to keep and maintain customers’ data.
The move was meant to protect the startups from fraud and disputes coming from the customers’ side.
“Let’s just say that there is a ‘bad’ customers who tweaked his records and it ended up looking different with what the company has … If such disputes happen, then the companies can check with the custodian as they will also have the same data,” he explained.
The new proposal will also regulate agreement and contract-signing between customers, insurtech startups, and insurance companies.
The report also stated that Indonesian Life Insurance Association (AAJI) is currently considering the implementation of insurtech to help make customer acquisition and payment faster and more reliable.
Image Credit: Caleb George on Unsplash
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