Part 1 - OJK Sandbox: The Participant of Sandbox and the Feasibility Criteria of Participant

Gain an initial understanding of the OJK Sandbox as a trial and development tool for financial sector technology innovation for the development of financial technology.

1. Sandbox is a room for innovation development by OJK to assess the feasibility and reliability of financial sector technology innovations.
2. Financial sector organizers can implement technology innovation to support economic activities, with testing conducted through the Sandbox mechanism.
3. Feasibility criteria of participant covers aspects such as financial services sector coverage, novelty element, benefits to consumers and ecosystem, readiness for piloting, and need for regulatory support.

Sandbox, as a room for innovation development, is a facility and

mechanism to facilitate trial and development of innovation provided by the Financial Services Authority (“FSA”) in order to assess the feasibility and reliability of Technological Innovation in the Financial Sector (Inovasi Teknologi Sektor Keuangan – “ITSK”).

The regulations regarding the Sandbox are regulated under OJK Regulation No. 3 of 2024 on the Implementation of Financial Sector Technology Innovation (“FSA Regulation 3/2024”), and OJK Circular Letter No. 5/SEOJK.07/2024 on the Mechanism of Trial Space and Innovation Development.

Any party engaged in activities within the financial sector in accordance with applicable regulations, whether as a limited liability company or other legal entity, including financial services institutions, may hold an ITSK to support innovation in economic activities.

For organizers who hold an ITSK and wish to be tested, the testing is carried out through the Sandbox mechanism organized by the OJK. The implementation of the Sandbox is intended to ensure that innovation and technology development in the financial sector are carried out responsibly with good risk management, by:

• implementing trials within a limited time period and scope;
• providing an explanation of the applicable provisions in the financial services sector;
• implementing the development of ITSK at an early stage; and
• providing other facilities.

Applications to become the participant of Sandbox can be seen in Article 9 of FSA Regulation 3/2024.

To be able to become a participant, OJK will examine the feasibility of the innovation based on these following criteria:

• innovation in the scope of financial services sector;
• innovation that fulfils the element of novelty and/or has a significant differentiating;
• innovation that provide benefits, improve services, and provide added value;
• innovation that are ready for testing and development;
• innovation that require trial and development support; and
• other criteria determined by OJK.