Supervision in the financial services sector is very important, so an institution with this function is needed.
The institution referred to is OJK which stands for Financial Services Authority.
Of course, OJK is no longer a foreign institution for those involved or active in the financial world.
It should be noted that OJK will supervise both bank and non-bank institutions.
So, to better understand the Otoritas Jasa Keuangan (Financial Services Authority), its goals, duties, and roles, let’s look at the following review.
What is OJK?
An abbreviation of the Otoritas Jasa Keuangan (Financial Services Authority), OJK is an independent institution with the duties, authorities, and functions to regulate, supervise, inspect, and conduct investigations related to all institutions in the financial sector.
It is also important to note that the meaning of independence here is that OJK is free from the influence of other parties in carrying out its role.
In addition, the purpose of establishing this institution is to comprehensively support all the needs of the financial services sector, which will ultimately increase the country’s economic competitiveness.
Therefore, Otoritas Jasa Keuangan’s role in Indonesia’s financial services sector is related to supervision, regulation making, and consumer protection in the financial services sector.
After knowing what the Otoritas Jasa Keuangan or OJK is, it is also important to understand the function of this institution.
As mentioned earlier, OJK’s functions include regulation, supervision, guidance, consumer protection, and maintaining the financial sector’s stability.
With an understanding of these functions, later financial sector actors will know OJK’s efforts to provide great benefits to this sector.
The following are the functions of the OJK that need to be known:
OJK’s first function is related to regulation. In this case, OJK will issue regulations and policies that regulate the activities of financial institutions in the country.
In addition, the OJK will oversee the licensing process for financial institutions that will operate in Indonesia.
OJK also has a supervisory function. In this case, OJK will oversee financial institutions to ensure compliance with OJK regulations and policies.
In addition, OJK will also carry out comprehensive monitoring of the stability of the financial system.
The OJK also guides financial institutions to improve the quality of governance, management, and compliance with regulations.
The OJK will also supervise banking, capital markets, Sharia financing institutions, and insurance.
4. Consumer Protection
OJK protects the interests of customers and consumers of financial services by ensuring transparency, honesty, and equality in the relationship between financial institutions and customers.
OJK also provides education and information to the public regarding financial products and services.
5. Maintain Financial Sector Stability
Finally, the function of the OJK is to maintain the stability of the financial sector in the country by monitoring risks that may arise.
Then, the OJK will also take the necessary precautions to prevent a financial crisis.
If you already understand the functions of the OJK, then you also need to know what the OJK’s goals are.
Understanding the objectives of the OJK is very important, especially for those who have direct contact with this institution in the financial services sector.
Furthermore, understanding OJK’s objectives will help build awareness and mutual understanding among parties involved in the financial services sector.
The following are OJK’s objectives that need to be known, including:
1. Maintain Financial Sector Stability
The first objective of OJK as a supervisory agency for the financial services sector is to maintain the financial sector’s stability.
This stability is important because it minimizes the risk of a financial crisis that could hamper the economy’s pace.
2. Protecting Customer Interests
The next objective of OJK is to protect customer interests from business activities that can potentially cause losses.
In addition, OJK will also try to protect consumers’ data and ensure that financial institutions will present reliable financial information.
3. Encouraging Healthy Economic Growth
The Financial Services Authority also aims to encourage healthy economic growth.
With healthy economic growth, there will be more open access to financing and investment in the country.
4. Creating a Safe and Reliable Investment Climate
Finally, on this list, OJK’s goal is to create a safe and trusted investment climate.
This is important because a safe investment climate will attract investors from within and outside the country.
OJK Duties and Authorities
Next, it is also very important, especially for financial sector actors, to understand the duties and authorities of OJK.
Understanding the duties and authorities of the OJK will also help to better understand the role and functions of the OJK as a regulator, supervisor, and protector in the financial services sector.
It is also important to create a conducive financial services environment for anyone involved in it.
The following are some of the duties and powers of the Financial Services Authority (OJK) that need to be known:
The first task and authority of the OJK is to regulate and develop regulations related to the financial services sector, for example, making regulations.
This is important because, with the regulation from the OJK, it is hoped that conducive conditions and situations will emerge in the country’s financial services sector.
The next tasks and authorities are related to the supervision of financial institutions in Indonesia.
The objective is to ensure that the business activities carried out by financial institutions are in line with applicable regulations.
Fostering financial institutions is also the duty and authority of the Financial Services Authority.
By providing guidance, it is hoped that the development of good financial institutions will be realized.
4. Consumer Protection
OJK also carries out duties and authorities related to consumer protection in the financial services sector.
In this case, OJK will take firm action against business practices that have the potential to harm and protect consumers’ data.
5. Law Enforcement
Regarding the duties and authorities to enforce the law, the OJK can impose sanctions for violating the rules and regulations in the financial services sector.
This is also important for OJK to achieve stability in the financial services sector and protect other business actors and consumers.
6. International Cooperation
Finally, OJK also has the duty and authority to cooperate with financial institutions/financial supervisory authorities in other countries.
This collaboration also covers various aspects, from information exchange to cooperation to manage risks related to the financial services sector.
The Role of OJK in Crypto Asset Exchanges
In carrying out its function as a supervisor in the financial services sector, OJK also has an important role in exchanging crypto assets.
It should be noted that the Otoritas Jasa Keuangan has a role in monitoring and protecting traders from the risk of exchanging crypto assets.
OJK did this about consumer protection and maintaining stability in the financial services sector.
Almost the same as the duties and authorities earlier, the important role of OJK in supervising and protecting the public from the risk of crypto asset exchanges can be seen starting from the supervision side to consumer protection.
In this case, OJK can oversee the exchange of crypto assets in Indonesia to prevent potential risks.
Apart from that, OJK also plays a role as a consumer protector from risks related to the exchange of crypto assets, for example, by educating the public regarding the risk of crypto price volatility and so on.
In conclusion, the presence of the OJK is very important as a supervisory agency for the financial services sector in the country.
This is related to the functions, duties, and authorities of the OJK as a supervisor, regulator, law enforcer, and protector in this sector.
In the end, the important role of the OJK aims to create stability in the Indonesian financial services sector.
Therefore, it is very important to appreciate OJK’s efforts to protect the interests of customers and the public in general who have direct contact with this sector.
This appreciation also needs to be given to OJK’s commitment to creating a financial services sector with integrity by functioning as a supervisor in the financial services sector.
So, now you understand what OJK is, from the definition and objectives to the functions of institutions in the financial services sector.
Furthermore, you can also read articles related to institutions in the futures and commodity trading sector, namely Bappebti, only at INDODAX Academy.