At the Asian Banker Finance Indonesia 2024, co-hosted with PERBANAS (the Indonesian Association of Banks), Indonesia’s top financial leaders, regulators and policymakers outlined the roadmap for the country’s financial sector transformation under Vision 2045. The event themed “Innovation and regulatory excellence: Charting our future in banking” was a platform for in-depth discussions on how Indonesia plans to deepen its financial sector, increase resilience, and foster digital finance innovations.

Dr. Adi Budiarso, Director of the Financial Sector Policy Centre, Fiscal Policy Agency at the Ministry of Finance, focused on the long-term strategy to deepen financial services and expand the roles of banking, insurance, and pension funds. Dr. M. Zulkifli Salim, Deputy Director of Banking Development at Otoritas Jasa Keuangan (OJK), the Indonesian Financial Services Authority, presented critical regulatory guidelines to ensure banking resilience in the face of digitalisation.

Both leaders emphasised the importance of supporting micro, small and medium sized enterprises (MSMEs) and harnessing the potential of the digital economy, which is a significant driver in Indonesia’s financial deepening strategy.

Vision 2045: Financial sector deepening

Dr. Adi Budiarso outlined the ambitious Vision 2045, a roadmap that aims to transform Indonesia’s financial sector into a robust, inclusive, and competitive industry by 2045. He emphasised that financial sector deepening will be crucial for achieving national economic stability. "We are targeting to increase banking assets to 200% of GDP, with insurance assets and pension funds growing to 20% and 60% of GDP, respectively," Dr. Budiarso explained, as it aims to significantly expand the depth and diversity of Indonesia’s financial sector.

The Financial Sector Policy Centre, which Dr. Budiarso leads, plays a critical role in ensuring that policies support the development of a diversified financial system, spanning capital markets, structured products, and non-bank financial institutions. These expansions are underpinned by the Financial Services Draft Law, part of the government’s broader Omnibus Law, which establishes a legal framework for financial sector growth and digital transformation.

MSMEs are central to this vision. They contribute 60% of GDP and employ 97% of the workforce, but many face significant barriers to financing and market access. To address these challenges, the government aims to digitise 30 million MSMEs by 2024. "By digitising MSMEs, we enable them to access broader markets and financing through e-government procurement and digital platforms," Dr. Budiarso said.

The digital economy is projected to play a pivotal role in this transformation. By 2025, Indonesia’s digital economy is expected to reach $109 billion, with digital payment transactions forecasted to hit $804 billion by 2030.

Banking resilience: OJK’s regulatory framework

Dr. M. Zulkifli Salim, representing OJK, outlined new banking resilience guidelines that aim to ensure the operational and business resilience of Indonesia’s banking system. "The resilience of our banks is paramount in an increasingly digital world," he emphasised. The guidelines, part of the Financial Services Industry Draft Law, focus on strengthening cybersecurity, consumer protection, and business continuity in a rapidly evolving financial landscape.

These resilience guidelines align with the broader Digital Banking and Finance Roadmap (2024–2028), which will guide Indonesia’s banking sector as it transitions to digital operations. The roadmap fosters partnerships between banks and fintech companies, encouraging the adoption of emerging technologies such as artificial intelligence (AI), blockchain, and data analytics. It will also form part of the Financial Services Industry Draft Law, to focus on ensuring both operational and business continuity in the face of growing risks. These guidelines, Dr. Salim emphasised, are designed to protect the system against cybersecurity threats, ensure strong data protection standards, and ensure that banks are equipped to continue operations during crises

"The financial sector must innovate, but innovation must come with safeguards," Dr. Salim noted, referring to the dual importance of regulation and digital transformation. OJK’s approach to regulating digital financial services ensures that financial institutions can adapt to changes without compromising security or stability.

The role of the Nusantara Financial Centre

The Nusantara Financial Centre will be a cornerstone of Indonesia’s financial future, positioned in the newly developed capital city of Nusantara in East Kalimantan. The move of the capital from Jakarta to Nusantara is part of a broader government strategy to decentralise economic activities and ensure more equitable development across the Indonesian archipelago. It is a central pillar of Indonesia’s strategy to promote regional financial integration and global competitiveness.

Dr. Salim highlighted that the Nusantara Financial Centre will not only serve as a hub for commercial banking and wealth management, but it will also play a key role in advancing cryptocurrency transactions, Islamic finance, and sustainable finance. "The Nusantara Financial Centre will be a hub of innovation, attracting international investors and promoting Indonesia as a leader in ASEAN financial integration," Dr. Salim said.

This financial hub will be critical for developing advanced financial services and ensuring that Indonesia remains competitive in the global financial markets. Additionally, it will support the growth of structured products, capital markets, and pension funds, further enhancing Indonesia’s financial depth.

Collaboration with PERBANAS and financial sector sustainability

Anika Faisal, Secretary General of PERBANAS, emphasised the critical role of banks in achieving these goals. PERBANAS, as the umbrella organisation for Indonesia’s banks, has been instrumental in fostering collaboration between banks, fintech companies, and regulatory bodies. "The banking sector will play a central role in promoting financial inclusion and driving sustainable finance," Faisal explained.

She pointed to the integration of environmental, social, and governance (ESG) criteria into lending and investment practices as a key priority for banks. "Banks are taking steps to incorporate ESG considerations, ensuring that sustainability becomes a core part of our financial ecosystem," Faisal said.

Faisal also reiterated that collaboration between industry players, including fintechs and regulators, is crucial to the success of the Digital Banking and Finance Roadmap and Indonesia’s broader financial transformation.

Towards a resilient and inclusive financial future

The Asian Banker Finance Indonesia 2024 was a timely and excellent forum for industry players to discuss how Indonesia will achieve its long-term financial goals under Vision 2045. Dr. Adi Budiarso and Dr. M. Zulkifli Salim emphasised that innovation, regulatory excellence, and financial inclusion are the key drivers of this transformation. By supporting MSMEs, embracing digital transformation, and ensuring the resilience of financial institutions, Indonesia is laying the groundwork for sustained economic growth and stability.

The establishment of the Nusantara Financial Centre is a bold step in this journey, positioning Indonesia as a regional financial hub while promoting sustainable finance and ESG principles. The combined efforts of the Ministry of Finance, OJK, Bank Indonesia, and PERBANAS will ensure that Indonesia’s financial sector is well-prepared for the challenges and opportunities that lie ahead.

As Indonesia moves towards 2045, the vision for a deep, resilient, and inclusive financial sector will drive economic growth, enhance financial access, and foster innovation that benefits the entire nation.