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Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
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Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
With fintech paving the way forward, traditional banking followed suit by revolutionizing its services. From 2022 to 2023, the banking industry’s fund distribution increased by 6.28 percent, source of funds increased by 6.33 percent, and total assets in the industry grew by 6.98 percent, reaching a total of US$8.22 trillion. Moreover, even regional banks have been benefitting from this wave of innovation. For the same period from 2022 to 2023, the regional banking sector saw a 7.67 percent in distributed funds, an 8.08 percent increase in source of funds, and a 7.52 percent increase in total assets, reaching a total of US$137.96 billion.
Innovations in Indonesia’s finance sector extend beyond financial services. On September 2023, the Indonesian monetary authority, Bank Indonesia (BI), introduced three pro-market monetary instruments that function as short-term fixed income securities with high coupon rates. The three instruments, SRBI, SUVBI, and SUVBI, were able to collect Rp 409 trillion (US$25.2 billion), US$2.31 billion, and US$387 million, respectively.
Particularly in the case of the SRBI, this instrument represented an innovative way to attract capital flow from abroad during a period of high credit costs and slow investment. Approximately 20.77 percent, or Rp 85.02 trillion (US$ 5.26 billion), of the total outstanding SRBI were owned by non-Indonesian residents, underscoring the SRBI’s success as a monetary instrument.
Even when compared to other countries in the same region, the Indonesian finance sector stands out for its stability against fluctuations. Throughout 2023, the global cost of credit was high due to hawkish Fed policies made to curb US inflation, resulting in a stagnation of capital flow on a global scale. Entering the second quarter of 2024, the composite index of many Southeast Asian countries such as Singapore and Thailand recorded price decreases compared to the same period last year, reaching -3.96 percent and -13.9 percent on the Straits Times Index (STI) and the Bangkok SET index, respectively. Meanwhile, the Jakarta Stock Exchange Composite Index (JKSE) recorded a price increase of 5.18 percent for the same one-year period.
In summary, the Indonesian financial sector stands out for its stability and consistency, maintaining growth through innovation even during periods of austerity or global uncertainty. This consistency is also reflected in its GDP, which grew by 7.4 percent from 2022 to 2023, contributing roughly 4.16 percent to the national GDP in 2023.
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Over the past two weeks, the government has begun overseeing the implementation of Communications and Digital Ministerial Regulation No. 9/2026. The policy reflects a national push to strengthen protections for children, though concerns have emerged regarding its effectiveness and its potential impact on children’s access to information and freedom of expression.
This regulation serves as a technical guideline for Government Regulation No. 17/2025 on child protection in electronic systems, commonly known as PP Tunas. A central provision is the ban on social media use for children under the age of 16, a measure designed to shield minors from online risks such as grooming, abuse, and harmful content.
Communications and Digital Minister Meutya Hafid described these risks as a “digital emergency”, noting that an estimated 70 million Indonesian children under 16 are currently active on social media.
This move aligns with a growing global trend toward social media regulation. Australia was among the first to impose a sweeping ban, passing a law in 2024 that took effect in December 2025. Similar restrictions have emerged in the Indian state of Karnataka and in Brazil, where policies took effect in March 2026. Brazil’s model requires users under 16 to link accounts to a legal guardian and prohibits addictive features like infinite scrolling, while Malaysia and Spain are currently considering similar measures.
In Indonesia, the policy officially took effect on March 28, and platforms were given a three-month window to complete self-assessments and seek classification as low-risk providers. The first phase of the regulation targets eight major platforms: YouTube, Facebook, Instagram, Threads, TikTok, X, Roblox and Bigo Live.
Compliance across these Big Tech corporations has been varied. Bigo Live and X moved quickly to implement age-verification mechanisms and deactivate accounts belonging to users under 16. Meanwhile, Roblox and TikTok have shown partial compliance; Roblox introduced restrictions for users under 13 that limit them to offline play, and TikTok has begun gradually deactivating accounts for those under 16.
However, major technology companies have shown significant reluctance. Representatives from Meta and Google were summoned twice by the ministry, eventually complying with an examination on April 6–7.
Meta argued that parents should decide which applications their teenagers use, warning that government bans might drive youth toward unregulated platforms. Google echoed these concerns, suggesting that age-based restrictions could make children less safe by encouraging them to access content without accounts, thereby bypassing existing parental controls and safety filters.
The debate over parental involvement is rooted in a difficult reality, as digital literacy in Indonesia remains a challenge. The national Digital Literacy Index consistently shows only moderate levels of competence, suggesting that many parents may lack the skills needed to guide their children effectively. Similar enforcement struggles are appearing in the gaming sector, where users of the platform Steam recently reported the introduction of age ratings under the Indonesia Game Rating System.
While this aligns Indonesia with standards in Brazil and Germany, early implementation has been criticized for inconsistency, with some harmless games rated 18+ while adult content was deemed suitable for children.
Beyond these logistical hurdles, there is the critical issue of human rights. Usman Hamid, executive director of Amnesty International Indonesia, warned that the policy risks depriving millions of young people of their rights to communicate, access information and express creativity.
Ultimately, Indonesia faces the challenge of striking a workable balance between protection and control. While the regulation addresses the failure of platforms to safeguard young users, it cannot succeed in a vacuum. Without corporate accountability, greater digital literacy and active parental involvement, enforcement may prove to be either ineffective or easily circumvented.
The success of this policy will depend on how carefully the government navigates the line between safety and the fundamental rights of the digital generation.
