Executive Summary

Key insights and market outlook

The Financial Services Authority (OJK) has formed two new departments: the Department for UMKM Development and Islamic Finance, and the Digital Banking Supervision Directorate, effective 2026 ¹

²³. These moves aim to strengthen UMKM financing access and enhance digital banking supervision. The new departments will focus on inclusive financing schemes for UMKM and comprehensive oversight of digital banks, addressing both financial inclusion and risk management.

Full Analysis

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Deep Dive Analysis

OJK Strengthens UMKM and Digital Banking Sectors through New Departments

Enhanced Support for UMKM Development

The Financial Services Authority (OJK) has established a new Department for UMKM Development and Islamic Finance to boost UMKM financing access and develop the Islamic finance ecosystem ¹

. This move underscores OJK's commitment to supporting UMKM as a key national economic pillar, given their significant contribution to GDP and employment. The new department will focus on implementing inclusive financing schemes and developing a more integrated Islamic finance ecosystem.

New Regulations for UMKM Financing

To support UMKM growth, OJK has issued POJK Number 19/2025, mandating financial institutions to provide more inclusive and affordable financing schemes ¹

. This regulation aims to address the current contraction in UMKM credit growth, which stood at -0.11% year-on-year as of October 2025. The new rules are expected to enhance financial access for UMKM players.

Strengthening Digital Banking Supervision

In a parallel move, OJK has formed a dedicated Digital Banking Supervision Directorate to oversee the rapidly evolving digital banking landscape ²

³. This new directorate will implement a more comprehensive supervision framework that goes beyond traditional financial ratios to include business model sustainability, management professionalism, customer relationships, and digital resilience.

Key Focus Areas for Digital Banking Oversight

The enhanced supervision will particularly focus on three critical areas ³

:

Cybersecurity - Protecting against increasingly complex cyber threats
Third-party risk management - Overseeing risks associated with technology service providers
Customer data protection - Ensuring confidentiality and security of customer information

Rationale and Implementation

The establishment of these new departments reflects OJK's proactive approach to managing both the opportunities and risks in Indonesia's financial sector. With digital banking projected to reach US$360 billion by 2030, OJK is prioritizing adaptive and integrated supervision to maintain financial stability while fostering innovation ²

.

References