The role of the Financial Services Authority in supervising digital financial innovation for consumer protection (A study at the Financial Services Authority of Medan, North Sumatra)
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Abstract
Digital financial innovation (DFI) has revolutionized financial services accessibility but simultaneously introduced significant consumer risks, including data privacy breaches, fraud, and non-compliant business practices. This normative juridical study examines the legal framework and supervisory role of Indonesia's Financial Services Authority (Otoritas Jasa Keuangan/OJK) in overseeing digital financial innovations for consumer protection, focusing on OJK Medan, North Sumatra. The research employs a normative legal methodology with statutory and conceptual approaches, analyzing primary legal materials including Law No. 21/2011 on OJK, Law No. 4/2023 on Financial Sector Development and Strengthening, and OJK Regulation No. 3/2024 on Financial Sector Technology Innovation (ITSK) implementation. Findings reveal that Indonesia possesses a comprehensive legal foundation for DFI supervision, with OJK executing regulatory, licensing, supervisory, educational, and consumer complaint handling functions. The study identifies significant implications for physiotherapy and digital health services, where fintech integration in healthcare financing, health insurance, and tele-rehabilitation payment systems necessitates robust consumer protection mechanisms. Challenges include limited supervisory resources, inadequate digital literacy, and persistent illegal fintech operations. The research recommends institutional capacity strengthening, enhanced inter-agency coordination, optimized supervisory technology, and sustainable educational programs to create a secure, healthy, and sustainable digital financial ecosystem. This analysis contributes to understanding how financial regulatory frameworks can protect consumers in an increasingly digitized healthcare landscape
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