Bank Indonesia held the Indonesian Digital Financial Economy Festival (FEKDI) 2022 in Bali. This is a side event in the G20 Finance Track: Finance and Central Bank Deputies (FCBD) and 3rd Finance Ministers and Central Bank Governors Meeting (FMCBG) in Nusa Dua, Bali.
In this event, various components in the financial industry participated to create synergy and collaboration toward a more inclusive financial system. This is in accordance with FEKDI's 2020 theme, "Advancing Digital Economy and Finance: Synergistic and Inclusive Ecosystem for Accelerated Recovery."
Finantier also actively participated in FEKDI 2022, being a participant and initiating discussion sessions to provide insight to participants who attended in person or virtual.
There was also a “Mini Stage” session that discussed the use of SNAP, which was launched in 2021. In this discussion, the speakers were Edwin Kusuma (Co-Founder & COO Finantier), Novyanto (Deputy Director, Head of the Division of Development and Management of Data and Information of Bank Indonesia), and Dana Afriza (Executive Director of Perbanas).
Open Finance encourages collaboration
Starting the session, Edwin said that the implementation of Open Finance had a great opportunity to encourage financial inclusion in Indonesia. He also emphasized that collaboration and synergy between games are the essence of Open Finance, which plays an important role in the growth of the digital economy, as well as pushing Indonesia's financial inclusion index to reach 90% by 2024.
"Open Finance is an extension of Open Banking, one of the solutions for collaboration between Financial Service Institutions and Non-Financial Service Institutions. The application of Open Finance allows a company to securely integrate its services and provide a wider impact on society," explained Edwin.
Synergy through Open Finance, implemented via the Open API, also enables continuous innovation by financial institutions and provides various conveniences for consumers to guarantee a sense of security due to standardization. Another thing that Dana is highlighting is how Open Finance can reach more MSMEs to get financial services.
Perbanas itself always encourages this synergy and openness, one of which is adopting SNAP for Open API standardization in digital payment systems as a form of support for the financial ecosystem.
SNAP implementation progress
Prior to the implementation of SNAP (National Standard for Open API Payments), each application developer had different systems and standards. This can hinder the pace of innovation due to the lack of interoperability. This regulation encourages integration, interconnection, and interoperability of systems so that they are safe and comfortable when connected.
Regarding the development of SNAP, Novyanto from Bank Indonesia said that after the standardization was inaugurated, the implementation would be divided into 4 phases. In the first, which has gone so far, the focus is on implementing first-mover, namely 5 banks, 7 payment fintechs, and 3 e-commerce.
All payment service providers are expected to migrate to SNAP in the next phase. Then proceed to the third phase, which is to integrate all users --- for non-financial service provider institutions (eg. e-commerce), which are also targeted to be integrated by 2024. Finally, in the last phase, integration on the user side empowers MSMEs and non-profits.
"Digitalization is very fast, but BI already has a blueprint, so it doesn't lose its way. We have 5 visions, which were reduced to 5 initiatives, one of which is to set the Open API standard. Last year we succeeded in compiling SNAP, which is expected to overcome the fragmentation issue that has been Yes. The API technology that has been widely used before has its own language. With the standard, it is hoped that they can be connected, "said Novyanto.
Novyanto also said, to maximize SNAP, 3 things need to be considered. The first is related to the integration aspect. "If each player is still working to overcome their respective silos, the benefits of digitization are not maximized. But if they can be integrated, it will provide wider benefits. To be able to integrate requires interconnection and interoperability. And to produce interconnection and interoperability, standardization is needed, " he explained.
The second aspect is synergy, both between regulators and industry players as well as between industry players. And the last is inclusion, an effort to encourage financial innovation that all can enjoy. So that nothing is left behind.