Indonesia's Banking Sector Faces Growing AI Risks, OJK Warns

Rising AI Adoption in Banking

The Financial Services Authority (OJK) has raised concerns about the growing risks associated with the increasing use of Artificial Intelligence (AI) in Indonesia's banking sector. Through its Business Orientation Survey (SBPO) for Q4 2025, the OJK found that a significant number of banks are now leveraging AI in various business processes ¹

Positive Impacts of AI in Banking

The survey highlighted several positive impacts of AI adoption in the banking sector. AI has proven to be an effective tool for information gathering, summarization, and analysis, enabling banks to process large volumes of data quickly and comprehensively. This has helped reduce the workload on employees, particularly in routine activities that require diverse information sources ²

Risks Associated with AI Adoption

Despite the benefits, the OJK's survey also identified several risks associated with AI adoption. These include:

1. Job Displacement: Automation through AI could lead to the displacement of human workers, particularly in operational and basic service areas that are repetitive and manual ¹
   Source 1

   https://finansial.bisnis.com/read/20251124/90/1931211/penggunaan-ai-kian-masif-di-perbankan-ojk-wanti-wanti-soal-risiko
   ²
   Source 2

   https://finansial.bisnis.com/read/20251124/90/1931243/pengamat-ungkap-risiko-penggunaan-ai-di-perbankan-kian-nyata
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2. Cybersecurity Risks: The increased reliance on technology and third-party providers makes banks more vulnerable to system disruptions, cyberattacks, and data breaches, which could directly impact customer trust and operational stability ¹
   Source 1

   https://finansial.bisnis.com/read/20251124/90/1931211/penggunaan-ai-kian-masif-di-perbankan-ojk-wanti-wanti-soal-risiko
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3. Ethical and Privacy Concerns: The use of AI involves the analysis of large amounts of personal data, raising ethical questions about privacy and data protection. Ensuring transparent and accountable consent mechanisms is crucial to mitigating these risks ²
   Source 2

   https://finansial.bisnis.com/read/20251124/90/1931243/pengamat-ungkap-risiko-penggunaan-ai-di-perbankan-kian-nyata
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4. Algorithmic Bias: AI systems, which rely heavily on data and algorithms, can introduce bias in decision-making, potentially leading to discriminatory outcomes if not properly monitored and tested ²
   Source 2

   https://finansial.bisnis.com/read/20251124/90/1931243/pengamat-ungkap-risiko-penggunaan-ai-di-perbankan-kian-nyata
   .

Mitigating AI Risks

To address these challenges, the OJK emphasizes that while AI can replace certain procedures, it cannot replace the ethical values, trust, and integrity that are core to the banking industry. Banks must ensure that AI remains under human control and that appropriate safeguards are in place to mitigate the associated risks ²