Jakarta, Kominfo Newsroom – The Financial Services Authority (OJK) remains committed to advancing financial inclusion in Indonesia and the ASEAN region. A number of strategies have been adopted, one of which is the utilization of digital financial services.
Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar stated this at the ASEAN Fest 2023: OJK Seminar on Financial Inclusion in Jakarta, on Thursday (24 August 2023).
Mahendra explained that the ASEAN has a goal of advancing financial inclusion in the region by 2025, specifically reducing the average rate of financial exclusion from 44% to 30%.
Mahendra, citing estimates from the UN Capital Development Fund (UNCDF), stated that there is also a goal to increase the readiness of financial inclusion infrastructure in ASEAN countries from 70 to 85 percent.
"So, where do we stand now? Between 2017 and 2022, the exclusion rate in ASEAN decreased significantly from 46 percent to 32.6 percent. "This is good news," he stated.
Mahendra also stated that three essential foundations are required to facilitate the adoption of digital financial services to advance financial inclusion.
First, the government and private sector's commitment to developing digital financial services. This step necessitates a robust legal and regulatory framework for suitable financial information systems and communication technologies.
Mahendra stated, "The strategy is to implement digital financial services to stimulate economic growth, including making digital financial products and transactions accessible to the public through the use of available technology."
Second, continued Mahendra, developing and utilizing technological advances to create financial innovations and products that prioritize digital financial education and literacy.
Thirdly, educating the public about digital financial services, providing topics such as financial products, digital payment methods, and tips for effectively managing household finances.
According to Mahendra, sustainable economic growth in ASEAN is crucial for assuring that the financial sector has the resources necessary to expand financial integration. ASEAN is regarded as a favorable manufacturing location due to its copious natural resources and inexpensive labor.
While it has provided initial benefits for industrialization in some ASEAN member states, it has not provided the financial resources necessary to integrate rural and remote communities into the larger economic and financial system.
Given that the ASEAN region includes a number of developing countries, it is regarded as necessary for ASEAN to focus on value addition by integrating upstream and downstream vertical manufacturing.
"ASEAN is no longer merely a component of the world's manufacturing. ASEAN has simultaneously become one of the world's greatest markets," said Mahendra.
Even though the geopolitical and geoeconomic situation will worsen in the coming decades, he said, ASEAN must take advantage of this momentum by seizing the opportunity to become the epicenter of world growth by promoting a sustainable development model.
"ASEAN economic integration is based on dynamic competitive advantage as a source of global value chains to serve intra-regional and global markets," stated Mahendra. (Isma/US/Elvira)
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Photo caption: Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar giving a speech at the ASEAN Fest 2023: OJK Seminar on Financial Inclusion in Jakarta, Thursday (24 August 2023).
Foto: InfoPublik/Ismadi Amrin