Indonesian Financial Services Authority Research Articles

Factors That Influence Innovative Work Behavior of Y Generation Employees at The Indonesia Financial Services Authority

This study aims to examine a structural effect model of proactive behavior and workplace spirituality on the innovative work behavior of Generation Y employees at the Indonesia Financial Services Authority (IFSA) mediated by psychological empowerment. The variables in this study are exogenous variables consisting of proactive behavior and workplace spirituality, endogenous variable is innovative work behavior. Psychological empowerment is a mediator. As a hypothesis in this study is a theoretical model of the influence of proactive behavior and workplace spirituality on the innovative work behavior mediated by psychological empowerment fit with the empirical data on Gen Yof IFSA. Data collection techniques are done by self-report measurement, using the scale of proactive behavior, scale of workplace spirituality, scale of psychological empowerment and scale of innovative work behavior. Data analysis used the Structural Equation Model (SEM) with the help of LISREL analysis. The sampling technique was carried out by using simple random sampling with 279 respondents. The results showed that proactive behavior and workplace spirituality have positive and significant effect on innovative work behavior mediated by psychological empowerment, with an RMSEA coefficient of 0.010 and with an GFI coefficient of 0.97, so the hypothesis was accepted.

CO-MOVEMENT BETWEEN BANK LOAN GROWTH AND ECONOMIC GROWTH IN INDONESIA USING WAVELET COHERENCE ANALYSIS

This study investigates the co-movement between bank loan growth and economic growth in Indonesia from 2010 to 2020 using the Wavelet Coherence Analysis. The co-movements are divided into three different categories, i.e., bank ownership type, credit types, and bank size classification based on the Indonesian Financial Services Authority (OJK), referred to as the BUKU. This study shows that economic growth precedes bank loan growth in Indonesia between 2010-2020. Meanwhile, state-owned banks show the highest correlation between economic growth and loan growth among different types of bank ownership. In contrast, foreign-owned banks' loan growth shows a low correlation to economic growth. We also find that working capital loan growth has the highest correlation to economic growth than other loan types. Finally, this study reveals that medium-size banks (classified in BUKU 3) loan growth has the highest correlation to Indonesia's economic growth. Additionally, banks' loan growth in small banks (classified in BUKU 1 & 2) and large banks (classified in BUKU 4) shows fewer correlations. By discovering different co-movements between economic growth and loan growth of different bank ownership types, bank size groups, and loan types, regulators are expected to make valid policies to improve Indonesia's economic growth.

Who Should Regulate The Industry of Financial Technology?

Financial technology (fintech) has outgrown its capacity. Industry supervision and consumer protection have become a challenge. Until now, the Indonesian Financial Services Authority (OJK) has been considered responsible for supervising the financial technology industry. The purpose of this research is to determine whether the Indonesian Financial Services Authority is capable of leading the fintech industry and whether a separate agency to oversee the fintech industry is necessary. This study employs a normative juridical methodology. This study examines the entire financial industry. According to this research, the Indonesian Financial Services Authority lacks the authority to regulate the fintech industry. The government should enact special legislation and regulations to govern the fintech industry. The regulator must consider creating a separate agency to supervise the fintech industry, similar to the Indonesian Financial Services Authority. This particular agency is comprised of individuals with ties to the financial sector, the telecommunications industry, and other law enforcement personnel.

Keabsahan Akta Autentik Dari Risalah e-RUPS PT Terbuka Melalui Aplikasi eASY.KSEI

The The implementation of e-GMS in public company (PT) can be carried out with an application called eASY.KSEI which according to the provisions requires that it be made in the form of an authentic deed. Hence this study discusses, first, whether the authentic deed originating from the minutes of the e-GMS of Public Company through the eASY.KSEI Application complies with the provisions of Law No. 40 of 2007 on Limited Liability Companies? second, how is the validity of the authentic deed made from the e-GMS of public company minutes through the eASY.KSEI Application. The type of research used is normative law with statutory and conceptual approaches. The results of this study conclude, first, the form of minutes of meetings made in the eASY.KSEI application is not in accordance with the Limited Liability Company Law, but the minutes have been specifically regulated in accordance with the provisions of the Republic of Indonesia Financial Services Authority Regulation No. 16/POJK.04/2020 on Implementation of Electronic General Meeting of Shareholders of Public Companies; and secondly, the validity of an authentic deed will be fulfilled if the formal and material requirements are fulfilled as stipulated in the provisions of the Notary Office Law.

The impact of COVID-19 on bank stability: Do bank size and ownership matter?

During the COVID-19 pandemic, bank stability became a priority for the Indonesian Financial Services Authority and the government. Economic activity is expected to be restored by muffling the shocks caused by the COVID-19 outbreak. This paper investigates the influence of COVID-19 on banking stability by differentiating bank core capital size and ownership. Using data from 108 commercial banks in Indonesia for the period March 2020 and March 2021, the paper analyzes data using fixed effects regression. The results show that COVID-19 has a detrimental and significant effect on bank stability in Indonesia. Regardless of the size and ownership of a bank’s core capital, it was found that no bank is immune for a year to the severe implications of COVID-19. This condition was experienced by both state banks and private banks, large and small. To assist in the absorption of COVID-19 shocks, this paper proposes policies for regulators that include stimulus packages and countercyclical roles in the banking system via government-owned banks.

Future Banking: A Literature Review

Nowadays, digital transformation is a buzzword in an academic and business environment. Business, education, banking, government, manufacturing – almost every industry is being "digitally transformed" in the period of the fourth industrial revolution. Many studies, specifically in the last 25 years, tried to discover the elements, drivers, and barriers of digital transformation and the value creation through digital transformation (Verina & Titko, 2019). There is a variety of digital technology strategies. The consumer behaviour triggers a series of technological advances, for every bank must continue to prepare for the future of banking. Conventional banks that currently still have customers, namely traditionalists who feel they don't need digital channels, must also be ready (Insight, 2020). Likewise, digital banking must be ready for the use of future technology. The failure of banks to adapt to consumer needs and the adoption of digital technology will have a significant impact. The speed or phase in digital transformation for banking, specifically in Indonesia, is not the same. Digital transformation in Indonesia's banking industry started quite late compared to other Asian countries, such as Malaysia, Singapore and South Korea. This is due to, among other things, the geographical conditions of Indonesia, which is an archipelago where digital literacy is not homogeneous, and people still have traditional beliefs and preferences for doing their banking in conventional physical branches (Winasis, 2020). The Indonesia Financial Services Authority (FAS) stated that by 2030 in Indonesia, all current banks would be digital, so it is expected that there will be no more branch offices. In addition, native/traditional banks are currently competing with challenger banks and fintech. Banking must be able to know its position in the middle of this digital transformation phase to find the right strategy for future requirements. There are many papers that study about the digital transformation in many industries including banking, but the research about the parameter that can be used to define the future banking itself still few. The purpose of the study is to enrich the existing literature about the future banking by collecting the parameter for the future banking and answer the research question: How the future banking looks alike? Keywords: Future Banking, Digital Transformation, Open Banking, Banking Transformation, Indonesia Banking

Earning Persistence from Operational Cash Flow, Earnings Management, and Debt Policy

This study examines operating cash flow, earnings management, and debt policy on earnings persistence. This study employs a quantitative method approach. The research data is sourced from the financial statements of companies in the infrastructure, utilities, and transportation sectors listed on the Indonesia Stock Exchange for the period 2016 to 2020. The research data is sourced from www.idx.co.id, www.idnfinancials.com and the company's official website. Based on purposive sampling, the total research sample was 145 observations. Hypothesis testing is conducted by using multiple linear regression analysis for panel data. The results suggest that operating cash flow and debt policy are negatively associated with earnings persistence, while earnings management is not associated with earnings persistence. This research indicates that the Indonesia Financial Services Authority is to improve policies related to the financial reporting integrity of Indonesia-listed companies. In addition, the Authority needs to increase supervision over manager policies that can harm the interests of shareholders to improve corporate governance.

Scenarıo of Human Resources Management to Increase Commıtment of Mıllennıal Employees in Indonesıa Fınancıal Servıce Authorıty

Currently, 70% of the composition of Indonesia Financial Service Authority (OJK) employees are millennials, therefore OJK has an interest in maintaining the commitment of these millennial employees to maintain OJK performance in the future. The purpose of this research is to develop HR management scenarios to increase the commitment of OJK millennial employees, which is preceded by a study on the effect of the generation gap, organizational culture, employee engagement, and location fit on organizational commitment using the Mann- Whitney test, PLS-SEM, and scenario planning. The results of the Mann-Whitney test show that currently there is a generation gap at OJK, further results from the PLS-SEM show that the generation gap, organizational culture, and employee engagement have a significant effect on organizational commitment, including the mediating effect of employee engagement and the moderating effect of location fit according to organizational commitment show the same result. Based on the test results, an HR management strategy was developed to increase the commitment of OJK millennial employees by using a scenario planning millennial approach in four scenarios: optimal, aggressive, selective, and minimal.

The Impact of Non-Performing Loans and Economic Shock on The Stability of Islamic Banking Performance as Moderating Variable in The COVID-19 Pandemic Era

This study aims to determine the effect of non-performing loans and economic shock as an intervening variable on loanable supply and loanable demand in Islamic banks which have an impact on the stability of the performance of Islamic banks in the Pandemic era. The research period is monthly with the research period from June 2019 – June 2021 using behavioral data analysis. We use secondary data from the Indonesian financial services authority. We investigated the data using linear and non-linear analysis to investigate the influence of loanable supply and loanable demand on the performance of Islamic banks in normal times or in a stable economy and the occurrence of economic shocks. From the results of our investigation, we found that non-performing loans have a significant impact on loan supply and loan demand in influencing the stability of the performance of Islamic banks in the era of the COVID-19 pandemic. Performance shocks in Islamic banks in the pandemic era are not only due to economic shocks but also due to non-performing loans from Islamic bank customers who are unable or have difficulty completing their obligations to Islamic banks.

Non-Performing Financing in Indonesian Islamic Commercial Banks During the Pandemic: A Macro and Microeconomics Perspective

Non-performing financing (NPF) as a measure of the soundness of Islamic banks might face adverse reactions during the Covid-19 pandemic. This study aimed to determine the effect of macroeconomic variables, including inflation, BI rate, exchange rate, and microeconomic variables such as CAR, FDR, and BOPO on the NPF of Islamic Commercial Banks registered by the Indonesian Financial Services Authority for the period 2013:5 to 2021:6. It also aimed to investigate the effect of the covid-19 pandemic on the NPF. This study utilized the autoregressive distributed lag (ARDL) analysis method. The ARDL was used to analyze the relationship between NPF and the macro and microeconomics variables in the short and long term. The analysis results showed that the covid-19 pandemic, inflation, and BI rate significantly affected the NPF of the Indonesian Islamic commercial banks in the short and long term. Additionally, it was evidenced that BOPO was only significant in affecting the NPF in the short time, and FDR was only significant in determining the NPF in the long term.

The Comparison of The Islamic and Conventional Bank Performance before and During Covid-19 Pandemic in Indonesia

This study aims to determine and compare the financial stability of banks during the crisis which is still being debated by taking the period before and after the covid 19 pandemics. This study uses a sample of all transactions of conventional banks and Islamic banks throughout Indonesia that are recorded by the Indonesian financial services authority. With a population of all conventional financial institutions and Islamic financial institutions, both registered and unregistered by Indonesian financial services authorities throughout Indonesia. The type of data in this study is secondary data sourced from the Indonesian financial services authority. To find out and compare the performance of conventional banks with Islamic banks and the resilience of conventional banks and Islamic banks to shocks, an analysis of the financial behavior of data in commercial banks was carried out using Threshold Autoregressive. We find that Islamic banks tend to be more stable in facing financial challenges due to the COVID-19 pandemic compared to conventional banks. The performance of conventional banks was very good in the period before the COVID-19 pandemic. However, when the coronavirus pandemic began to be reported, there was a huge decline in performance. Conventional bank recovery efforts have not been able to return to the original track. Conventional bank performance is slowing down and it tends to be difficult to return to its original performance value (before the COVID-19 outbreak). However, from the graph of performance forecasting between Islamic Commercial Banks and Conventional Banks, it can be seen that there is a difference in performance stability between Islamic Commercial Banks and Conventional Banks facing the COVID-19 pandemic.

Optimising the Role of the Financial Services Authority for a More Sustainable Business Ecosystem in Indonesia

This paper elaborates the role of the Indonesian Financial Services Authority in providing a legal framework, for public and financial services companies in particular, for achieving sustainability. It also provides a comparative analysis of sustainability regulations and functions undertaken by financial services authorities in other jurisdictions. This research takes a normative approach, combining an assessment of Indonesian laws and regulations related to business sustainability and a comparative approach; the latter provides insight into the comparable legal framework in the European Union and the United Kingdom. The Indonesian Financial Services Authority issued regulations on sustainable financing in 2017, and its sustainability roadmap was updated in 2021. Comparable provisions are found in the United Kingdom’s Financial Conduct Authority’s guiding principles on design, delivery, and disclosure of environmental, social and governance and sustainable investment funds, which acts as a supplement to the EU’s Sustainable Finance Disclosure Regulation. This paper hopes to contribute to the literature on business and human rights by providing an overview of the current role of the Indonesian Financial Services Authority in ensuring the sustainability of businesses under its auspices in comparison with similar agencies in the United Kingdom and European Union. Research on business and sustainability in Indonesia from a legal perspective is still rare, despite the rising urgency of the matter in developing business and human rights as well as climate change mitigation strategies.

Sanctions in Financial Services: Developing a Conducive Culture in Financial Industry in Indonesia

The research proposed adjustments to sanctions for criminal acts in the financial services industry in accordance with Law No. 21/2011. Based on the Law of the Republic of Indonesia No. 21/2011, the Indonesian Financial Services Authority (FSA) had the authority to regulate the financial industry in Indonesia. FSA had enormous capacity, including the authority to impose criminal sanctions in the financial services industry. However, criminals in the financial sector still recurred after establishing the OJK. One of financial services industry crimes began with Bank Indonesia Liquidity Assistance due to the 1998 Asian crisis, and the crisis due to the COVID-19 pandemic had resulted in several criminal acts in the financial industry such as the Bank Bukopin case and several cases of insurance companies such as Jiwasraya insurance. The research applied a normative juridical method. It concludes that criminal sanctions in the financial services industry can be imposed on individuals and/or corporations. This criminal sanction is imposed if someone deliberately ignores, does not fulfill, or hinders the exercise of the FSA's authority or deliberately ignores and/or does not carry out the FSA's written orders. A person's definition needs to be clarified in his/her position at a financial service institution to be subject to a criminal offense.

The Role of the Indonesian Government in the Era of Banking Disruption Innovation

Digital disruption innovation in the financial services industry is an innovation that has succeeded in changing the financial industry landscape, starting from its structure, technology, and marketing model. The emergence of the Financial Technology (Fintech) industry marks a disruptive innovation in the financial services industry. This study aims to analyze the role of the Indonesian government in the era of banking disruption. The research method used was descriptive analysis with a qualitative approach—data obtained through interviews and literature study, Bank Indonesia, the Indonesian Fintech Association, and the National Bank Association. Before the research started, the validity of the data was first tested. The results of the study state that the government encourages banking and fintech to grow side by side and is directed to collaborate immediately. The role of the government as a regulator has been performed by the Indonesian Financial Services Authority (OJK) and Bank Indonesia (BI, Central Bank of Indonesia) by issuing various regulations. The study concluded that there are three areas that regulators need to monitor and guard, including misuse of public funds, protection of the public, private data, and money laundering.

PENGGUNAAN ARBITRASE NASIONAL SEBAGAI ALTERNATIF PENYELESAIAN SENGKETA ASURANSI UMUM

Insurance is a coverage where a party act as the Insurer while the other party act as the Insured and proven by the agreement which is called by the Policy. Since 2011, insurance industry was being supervised by the Indonesia Financial Services Authority (OJK). Therefore, in carrying out its business activities should comply with the OJK regulations, including to determine the dispute clause in the Policy. The Alternative Dispute Resolutions for the Financial Services Sector has been established by OJK at the end of 2020 which provide an opportunity to the disputing party to solve their dispute outside the court. Indonesia has BANI Arbitration Center (BANI) which could be used as an alternative forum to settle the general insurance disputes in Indonesia, however it is contrary with regulation which has been issued by the OJK.

ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI PROFITABILITAS BANK MALUKU MALUT PADA MASA PANDEMI COVID-19

The corona virus diseases 2019 (Covid-19) has spread widely in Indonesia since the beginning of 2020. Until recently, this pandemic has gradually disturbed the whole social and economic sectors including banking industry. Bankers are facing various challenges and uncertainties in sustaining their businesses and simultaneously anticipating the better situation in the future. This research is aimed to identify the impact of capital adequacy, loan distribution, and efficiency on the profitability of Bank Maluku Malut in the Covid-19 pandemic period. This bank is basically categorized as a commercial bank. However, it also being recognized as a regional development bank. In total, there were 26 regional development banks in Indonesia. All financial data of Bank Maluku Malut which are required for analysis in this research are gathered from the Indonesia Financial Services Authority (OJK). These data were analyzed using a multiple linear regression model. It was found that the loan distribution has a significant and positive influence on the profitability. Meanwhile, the efficiency has a significant but negative impact on the profitability. The other finding is that the capital adequacy has no impact on the bank’s profitability.

RESPON PASAR ATAS PENGUNGKAPAN KEBERLANJUTAN PADA PERUSAHAN PERBANKAN DI INDONESIA: PERAN UKURAN PERUSAHAAN

This study examines the effect of sustainability disclosure on firm value and examines the moderating role of firm size in the association between sustainability disclosure and firm value. This research data uses data and information on financial statements and stock prices of financial sector companies in the banking sub-sector listed on the Indonesia Stock Exchange. Data obtained from www.idx.co.id and www.finance.yahoo.com with an observation period of 2018-2020. Based on purposive sampling, this study obtained a total sample of 47 observations. Hypothesis testing is done by multiple linear regression. The results show that the disclosure of sustainability reports does not affect firm value. In addition, firm size does not have a role in strengthening the effect of sustainability disclosure on firm value. This research indicates that the Financial Services Authority needs to develop sustainability disclosures under globally applicable standards. In addition, the Indonesia Financial Services Authority needs to supervise the implementation of sustainability disclosures carried out by companies in the banking sub-sector in Indonesia.

Data quality analytics, business ethics, and cyber risk management on operational performance and fintech sustainability

This study conducted a test to see the influence of data quality analytics, business ethics, and cyber risk management on operational performance and its implication on corporate sustainability of Fintech P2P Lending companies registered and licensed in Indonesian Financial Services Authority (OJK). This study used descriptive analysis and statistical method Structural Equation Modeling (SEM)-Lisrel. The data was collected by using questionnaires given to 104 managers from 91 Fintech P2P Lending companies registered and licensed at OJK until the end of December 2021. The results show that data quality analytics and cyber risk management had a positive and significant influence on operational performance. The results also show that analytical data quality, business ethics and cyber risk management had a positive and significant influence on operational performance. The findings of this study added to the limitations of the research literature on the elaboration of variables that determine performance and business sustainability in Fintech P2P lending.

The CEO’s foreign experience and the CEO’s share ownership: Does tax aggressiveness matter?

This study investigates the association between the CEO’s foreign experience and the CEO’s share ownership with tax aggressiveness. The research data is sourced from financial reports and annual reports of non-financial sector companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2019, obtained from www.idx.co.id. Based on purposive sampling, the total sample in this study amounted to 88 observations. Hypotheses testing in this study employed multiple regression analysis for cross-section data. This study concludes that the CEO’s foreign experience is negatively associated with tax aggressiveness, and CEO’s ownership is not associated with tax aggressiveness. Returnee CEO can adequately analyze the costs and benefits related to tax aggressiveness, and it is found that if they carry out tax aggressiveness in Indonesia, the costs incurred will be greater than the benefits received. Meanwhile, the CEO’s ownership in Indonesia is still low, so it cannot affect the tax aggressiveness level. This research indicates that the Indonesia Tax Authority need to pay attention to the CEO’s experience when conducting audits and need to cooperate with the Indonesia Financial Services Authority (OJK) to measure how the company behaves in running its business, whether the returnee CEO carry out all business ethics only or adequately those related to tax aggressiveness.

MICRO AND MACROECONOMIC DETERMINANTS OF THE FINANCIAL PERFORMANCE OF LIFE INSURANCE FIRMS IN INDONESIA: AN EMPIRICAL EVIDENCE

Insurance sector is an integral part of financial system which offers an important contribution in the nation’s economy. It provides long terms fund for investment which leads to improving financial and non-financial infrastructural facilities. The financial performance of insurance firms, therefore, is an important aspect needing special attention. The paper’s objective is to investigate the impact of micro and macroeconomic indicators on the financial performance of life insurance firms. Based on the Indonesia Financial Service Authority (IFAS) database, a set sample of 30 life insurance firms for the periods of 2011-2018 was generated. Panel data regression analysis was performed to test the formulated hypotheses. Random effect model was identified as the appropriate model indicating that differences in the characteristics between the studied life insurance firms have an effect on the dependent variable, in this case the return on equity. Based on the resulted model, it is revealed that the financial performance i.e. return of equity is affected consecutively by economic growth, expense ratio and current ratio in different direction and magnitudes.