Regulatory Challenges of Digital Banking Supervision in Indonesia

This study examines the legal and regulatory issues surrounding the supervision of digital banking in Indonesia, with particular attention to consumer protection, data security, and supervisory effectiveness. Employing a normative juridical approach, this research analyzes statutory instruments, regulatory policies, and institutional mandates of Bank Indonesia and the Financial Services Authority, as well as recent financial sector reforms under Law Number 4 of 2023 on Financial Sector Development and Strengthening. The findings indicate that the current regulatory framework remains fragmented and largely derived from conventional banking regulation, resulting in legal gaps in addressing digital-specific risks such as cybersecurity threats, technology outsourcing, and real-time supervision limitations. Furthermore, supervisory authorities face institutional and technical constraints in adapting oversight mechanisms to rapidly evolving digital banking models.