OJK Urges Banks to Strengthen Fintech Lending Oversight

Rising Defaults Prompt Regulatory Action

The Financial Services Authority (OJK) has called on banks to enhance their oversight of fintech lending partnerships amid a surge in default rates among peer-to-peer lending platforms. As of August 2025, total bank lending to fintech companies reached Rp 55.82 trillion, representing a significant 37.69% year-over-year growth ¹

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Key Concerns and Regulatory Focus

OJK's concerns are driven by the banking sector's substantial exposure to the fintech lending industry, as banks remain the primary source of funding for these platforms. The regulator is particularly focused on the channeling practices between banks and fintech companies, emphasizing the need for stricter due diligence and risk management procedures.

Parallel Developments in Banking Technology

In related news, OJK's latest Banking Business Orientation Survey (SBPO) for Q4-2025 revealed that banks are increasingly adopting Artificial Intelligence (AI) in their operations ²

. While this technological advancement brings efficiency and innovation, OJK has cautioned banks about potential risks associated with AI implementation, including cyberattack vulnerabilities and algorithmic bias.

Implications for Financial Sector

The dual focus on fintech lending risk management and AI adoption highlights OJK's proactive approach to regulating Indonesia's rapidly evolving financial technology landscape. Banks are now required to balance innovation with risk mitigation strategies, particularly in their collaborations with fintech lending platforms.