Implementation of Anti-Fraud Strategy for Financial Service Institutions

Regulation / Regulation Search / Implementation of Anti-Fraud Strategy for Financial Service Institutions

Sector: Banking; Capital Market; Non-Bank Financial Institutions; Sharia; Financial Technology

Sub-Sector: Other Regulations

Type of Regulation: OJK Regulation

Regulation Number: 12 of 2024

Effective Date: 10/31/2024

Appendix 1 POJK 12 of 2024 Implementation of Anti-Fraud Strategy for Financial Service Institutions.pdf Abstract POJK 12 of 2024 Implementation of Anti-Fraud Strategy for Financial Service Institutions.pdf FAQ POJK 12 of 2024 Implementation of Anti-Fraud Strategy for Financial Service Institutions.pdf

Page Content Financial Services Authority of the Republic of Indonesia Regulation Number 12 of 2024 concerning the Implementation of Anti-Fraud Strategy for Financial Service Institutions (POJK SAF LJK).

Abstract: The increasing complexity of business activities of financial service institutions (FSIs) results in increased exposure to the risk of fraud. The risk of fraud occurrence is significant because it impacts losses to the financial services industry, the government, and the public. To minimize the occurrence of fraud, various strengthening measures are required in the internal control systems of FSIs, which simultaneously serve as support for the implementation of risk management in FSIs. Currently, anti-fraud strategies are already in operation in the commercial banking industry, the insurance industry, and the financing company industry through regulatory instruments issued by the OJK, although there are differences in the complexity of the standards regulated therein. Therefore, provisions regarding the implementation of anti-fraud strategies for commercial banks, insurance, and financing companies need to be refined in an OJK Regulation regarding the implementation of anti-fraud strategies for FSIs so that they can apply to all financial service sectors in Indonesia.

The legal basis for this POJK is: Law No. 7 of 1992 as amended several times, most recently by Law No. 4 of 2023; Law No. 25 of 1992 as amended by Law No. 4 of 2023; Law No. 8 of 1995 as amended by Law No. 4 of 2023; Law No. 40 of 2004 as amended by Law No. 4 of 2023; Law No. 21 of 2008 as amended by Law No. 4 of 2023; Law No. 2 of 2009 as amended by Law No. 4 of 2023; Law No. 21 of 2011 as amended by Law No. 4 of 2023; Law No. 24 of 2011 as amended by Law No. 6 of 2023; Law No. 1 of 2013 as amended by Law No. 4 of 2023; Law No. 40 of 2014 as amended by Law No. 4 of 2023; Law No. 1 of 2016 as amended by Law No. 4 of 2023; Law No. 4 of 2016 as amended by Law No. 4 of 2023; and Law No. 4 of 2023.

This POJK regulates among other things: a. Types of acts classified as fraud include corruption, misuse of assets, financial statement fraud, deception, leakage of confidential information, and/or other acts that can be equated with fraud in accordance with applicable legislation; b. The scope of involved parties includes FSIs and controlled organizations, consumers, and other parties cooperating with FSIs (including the private sector); c. The obligation of FSIs to formulate and implement an anti-fraud strategy; d. The formulation and implementation of the anti-fraud strategy consists of 4 (four) pillars, namely: (1) prevention; (2) detection; (3) investigation, reporting, and sanctions; and (4) monitoring, evaluation, and follow-up; e. The obligation to implement a fraud detection system accompanied by increased understanding of relevant internal and external parties, supported by the implementation of adequate risk management; f. The obligation of FSIs to have a working unit or function responsible for handling the implementation of the anti-fraud strategy, adjusted to the complexity of the FSI's business activities; g. Types and guidelines for filling out reports that must be submitted by FSIs to the OJK, consisting of the anti-fraud strategy, reports or corrections to anti-fraud strategy implementation reports, and reports on significant impact fraud incidents; and h. Mandatory reporting must be submitted completely, accurately, currently, and wholly.

Note: This POJK applies to all FSIs.

Upon the commencement of this POJK: a. POJK Number 39/POJK.03/2019 concerning the Implementation of Anti-Fraud Strategy for Commercial Banks; b. Chapter XII Fraud Control and Anti-Fraud Strategy of POJK Number 10/POJK.05/2019 concerning the Conduct of Business of Sharia Financing Companies and Sharia Business Units of Financing Companies; c. Chapter XII Fraud Control and Anti-Fraud Strategy of POJK Number 35/POJK.05/2018 concerning the Conduct of Business of Financing Companies; d. Article 4 paragraph (3) letter e and letter f of POJK Number 55/POJK.05/2017 concerning Periodic Reports of Insurance Companies; and e. Article 72 of POJK Number 69/POJK.05/2016 concerning the Conduct of Business of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies; and its implementing regulations, are revoked and declared invalid.

This POJK was enacted on July 31, 2024, and will take effect after 3 (three) months from the date of enactment.

This POJK consists of: Explanation: 9 pages Appendix I - Guidelines for Implementation of Anti-Fraud Strategy: 10 pages Appendix II - Anti-Fraud Strategy Implementation Report: 15 pages Appendix III - Significant Impact Fraud Report: 13 pages