Introduction: Why is Personal Data Protection Important?

The fintech industry is growing rapidly, but behind digital innovation, personal data protection is a crucial issue. Regulations such as Law No. 27 of 2022 on Personal Data Protection (PDP Law) and OJK Regulation No. 22 of 2023 on Consumer Protection in the Financial Services Sector set obligations for fintech companies to protect user data. Compliance is not just a legal requirement but also a way to build consumer trust.

Key Obligations of Fintech Companies in Personal Data Protection

To remain compliant with regulations, fintech companies must ensure several key aspects, including:

1. Obtaining User Consent – All data processing must be based on clear user consent.
2. Verifying Data Accuracy – Ensuring collected data is accurate, complete, and secure.
3. Keeping Records of Processing Activities (RoPA) – Documenting data processing activities for audit and transparency purposes.
4. Handling Data Subject Requests – Facilitating user rights to access, correct, or delete their data.
5. Conducting Data Protection Impact Assessments (DPIA) – Identifying risks associated with large-scale data processing.
6. Implementing Strong Data Security Measures – Preventing data breaches through encryption and cybersecurity systems.
7. Secure Data Deletion and Disposal – Ensuring unnecessary data is removed to minimize the risk of breaches.
8. Taking Responsibility for Data Protection Failures – Establishing response procedures in case of data leaks.

Steps for Implementation in Fintech Businesses

To ensure compliance with regulations, fintech companies should follow these key steps:

1. Implementing Consent-Based Data Processing

• Use methods such as opt-in checkboxes, click-through consent, or pop-up notifications to obtain explicit user consent.
• Provide a clear and easy-to-understand Privacy Notice.

2. Verifying User Identity

• Utilize electronic verification, biometric authentication, or third-party verification (Dukcapil/OJK).
• Apply liveness detection (facial or voice recognition) to ensure the authenticity of users.

3. Recording Data Processing Activities (RoPA)

• Document information such as processing purposes, types of collected data, and data recipients.
• Ensure all data is encrypted and only accessible to authorized personnel.

4. Handling User Requests

• Allow users to access, correct, or delete their data within 3x24 hours.
• Provide customer service contacts or an online portal to process these requests.

5. Ensuring Data Security

• Implement encryption, firewalls, and two-factor authentication (2FA) to protect data.
• Continuously monitor systems to detect potential data breaches.

6. Appointing a Data Protection Officer (DPO)

• The DPO ensures company compliance with the PDP Law and related regulations.
• Responsible for assessing and managing data protection risks.

7. Secure Data Transfers and International Compliance

• Adhere to regulations concerning cross-border data transfers.
• Use high-level encryption when transferring data to third parties.

Penalties for Personal Data Protection Violations

Violating data protection regulations can have severe consequences, including:

• Administrative sanctions with fines of up to 2% of annual revenue.
• Criminal sanctions of up to six years in prison or fines of up to IDR 6 billion.
• Reputation damage, which can lead to a loss of consumer trust.

Conclusion: Why is Compliance Beneficial?

Implementing data protection policies is not just a legal obligation; it is also a competitive advantage. Consumers who feel secure will remain loyal to fintech services. By following these guidelines, fintech companies can build a secure, transparent, and trustworthy digital financial ecosystem.