IDN FSA published regulation number 12 of 2024 concerning the implementation of anti-fraud strategies (SAF) for financial services institutions in Indonesia.
Follows IDN FSA May 2024, launched anti-fraud strategy for tech firms, see #212614.
Background
The increasingly complex business activities of financial services institutions (LJKs) have resulted in increased risk exposure for LJKs to the potential for fraud.
To minimize the risk of fraud, various strengthening of LJKs' internal control systems is needed, which is also a form of support for the implementation of risk management.
Key Provisions
Defines the types of acts that are classified as fraud including corruption, misuse of assets, fraudulent financial reporting, and leaking of confidential information.
The regulation applies to LJKs and controlled organizations, consumers and other parties who cooperate with LJKs including those within the private sector.
LJKs are must prepare and implement anti-fraud strategies consisting of four pillars: prevention; detection; investigation, reporting and sanctions; monitoring, evaluation.
Outlines obligations to implement a fraud detection system accompanied by increased understanding of related internal/external parties, and supported by risk management.
There is also an obligation for LJKs to have a work unit or function to handle the implementation of anti-fraud strategies adjusted to the complexity of its business.
Effectiveness
The regulation is effective on Oct. 31, 2024 (i.e. 3 months from date of enactment).
Sep. 2024 Strategy Implementation
On Sep. 14, 2024, IDN FSA issued a press release reaffirming its commitment to the strengthening of rules related to anti-fraud, and implementation of good governance.
A collaborative approach is needed between IDN FSA, the financial services industry, law enforcement officers, government agencies, and other stakeholders for anti-fraud.
IDN FSA will continue to supervise the implementation of anti-fraud regulations and conduct periodic regulatory evaluations as part of Indonesia's membership to FATF.
