Abstract
The banking sector is facing a new competitor, namely Financial Technology (Fin-tech). Fin-tech itself can be described as an industry composed of companies using a new tech-nology and innovation with available resources in order to compete in the marketplace of tradi-tional financial institutions and intermediaries in the delivery of financial services. In Indonesia, Fin-tech has been widely developed since the past 3 years. Fin-tech faces a new challenge as a new service for financial consumer which adapts to new ways of living in modern digital tech-nology era. Basically, Fin-tech offers three main categories such as payment, personal finance, and financing. In financing application there are peer to peer financing, social crowd funding, and loan marketplace. All of these kinds of application have some issues in legal framework and data protection due to the use of communication technologies such as internet, social networks, Smartphone, massive use of data with the Big Data, connected objects, etc. The use of big data and those new technologies create new opportunities for these sectors, and this development also raises significant data protection concerns. This paper discusses two legal issues of Fin-tech, the legal aspect, and the data protection.
Highlights
The financial sector has been facing a new model of technology called fin-tech
Fin-tech is an abbreviation derived from Financial Technology- a terminology that combines between financial and information technology
The convergence between startup business trends and modern fin-tech has brought a new era of financial service development from traditional financial system to consumer driven
Summary
The financial sector has been facing a new model of technology called fin-tech. New startup and established technology companies began to offer financial product and services directly to the business and general public. First the procedure related to banking is so complex; second the lack of access to banking in the region; third, the lack of knowledge of banking products, etc These facts contributed to the emerging of fin-tech startups in the past three years. The Indonesia Financial Service Authority (OJK) and Indonesian Central Bank (BI) issued new regulations regarding fin-tech service. The Regulatory Sandbox is a set of regulations which allows both fin-tech startups and established companies to test their innovative products in the area of Fin-Tech. The Regulatory Sandbox is a set of regulations which allows both fin-tech startups and established companies to test their innovative products in the area of Fin-Tech6 It is yet the best approach when dealing with the new technology. Regulators promote the innovation to grow faster and bigger by lowering barriers but still protect the consumers from the harmful effect of the new products
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