In stride towards bolstering the integrity and efficiency of Indonesia’s financial sector, TrustDecision and PT Artajasa Pembayaran Elektronis have forged a strategic partnership.
This collaboration is set to empower small to medium-sized banks and financial institutions in Indonesia by addressing key challenges and enabling them with advanced technological tools.
About Artajasa
Artajasa stands as a leading force in the realm of electronic transactions in Indonesia. They are known for their specialized payment network infrastructure services that cater to various sectors including banking, e-commerce, fintech, and more. Since its inception in 2000, Artajasa has been pivotal in revolutionizing electronic transaction and payment services. That reflects a broad spectrum of expertise in financial technology.
The Market Need and TrustDecision’s Role
We recognized the market’s demand for sophisticated yet affordable fraud prevention solutions.As such, with our advanced Fraud Detection System, known in the market for its comprehensive and efficient approach to fraud detection, complementing Artajasa's offerings to best serve the banks’ needs.
Objectives of the Partnership
The collaboration is driven by the goal to equip small and medium-sized banks inIndonesia with the tools to overcome:
- Technological limitations by introducing advanced fraud detection capabilities.
- Skills and budget constraints by providing a cost-effective solution.
- Regulatory compliance challenges, ensuring adherence to regulations like 39/POJK.03/2019.
Challenges Addressed
Indonesian banks face numerous challenges such as technological limitations, lack of market-skilled resources, budget constraints, stringent regulatory compliance, and a rising tide of banking fraud. This partnership is poised to deliver tailored solutions that address these specific needs.
The Rise of Banking Fraud
The rise of banking fraud has become a pressing concern in Indonesia. This is also a reflection of a global trend in the financial sector. As digital transactions increase and financial networks become more complex, the opportunities for fraud have multiplied. It has led to a surge in both the frequency and sophistication of fraudulent activities.
According to the analysis from the Indonesian Financial Transaction Reports and Analysis Center (PPATK) indicates a steady escalation in fraud incidents within Indonesia. The number of fraud-related suspicious action reports rose from 9,801 in 2019 to 13,338 in 2020, and further surged to around 23,000 by 2021 (source: United Nations). There has been a staggering increase in reported incidents over recent years. These include a variety of schemes ranging from identity theft and phishing to more complex cybercrimes affecting both individual customers and institutions. The rising trend underscores the urgent need for comprehensive and advanced fraud detection and prevention strategies to safeguard the integrity of Indonesia’s Financial Institution. This Fraud Detection solution compliments Artajasa's existing services to provide robust and secure solutions to answer ever changing Bank's technology requirements.
Stringent Regulatory Compliance
That is why, the Indonesian government is doubling down on their regulatory compliance to ensure banks are ready for the battle ahead. All banks in Indonesia are required to establish effective anti-fraud strategies to combat and manage fraud by January 1, 2020. As stated in regulation 39/POJK.03/2019 issued by the Indonesian Financial Services Authority (OJK). The aim is to ensure the implementation of anti-fraud strategies for commercial banks, where some key aspects include:
- Banks are mandated to detailed approach to anti-fraud strategies and reporting implementation.
- Banks must implement their anti-fraud strategy through four pillars of anti-fraud strategy—prevention, detection, investigation, monitoring, evaluation, and follow-up.
- Clearly defined what fraud entails to ensure fraud coverage.
- Banks are obliged to have an anti-fraud strategy as part of their risk management and internal control system.
- Banks are required to provide comprehensive fraud reports.
- Sanctions will be placed on banks that fail to prepare and implement an anti-fraud strategy.
It became imminent for banks, regardless of size to adhere to the comprehensive framework provided to fortify their institutions with anti-fraud strategies to meet compliance.
Technological Limitations
However, the bigger challenge for smaller banks is their capacity and capability to adopt advanced technology or innovation that can be on par to win the battle. Smaller banks frequently face constraints in accessing advanced technological tools and resources. It is particularly so when compared to their larger counterparts. This disparity often limits their ability to compete and innovate within the rapidly evolving financial sector.
Lack of Skilled Personnel & Budget Constraints
Additionally, adopting new technologies featuring advanced algorithms, artificial intelligence, and machine learning requires significant investment in specialized personnel who possess extensive training. That requires a substantial investment not just in a monetary sense but also in getting the right resources. And if they were to opt for off-the-shelf solutions, it’s financially not feasible too. The costs associated with third-party solution providers or in-house solutions present a substantial financial burden for many local small banks. Thus, making these technological advancements often prohibitive.
TrustDecision’s Fraud Detection System
Enters TrustDecision as a powerful ally to tackle the challenges faced by Indonesian banks.
TrustDecision’sFraud Detection System (FDS) is a testament to cutting-edge technology, designed to provide real-time transaction and event monitoring, multi-channel fraud prevention, and comprehensive risk management. Our system's design incorporates a full-stack solution that combines graph construction, storage systems, knowledge computing, and a suite of products to unearth hidden relationships within transactions. It leverages data from over 120 million devices, providing a massive network to track and identify common fraudsters through device fingerprinting and fraud ring mining.
Offered asa Platform-as-a-Service (PaaS) or Software-as-a-Service (Saas), our solution integrates seamlessly with banks’ existing systems. It stands as a bulwark against fraudulent activities, underpinned by expert rules and machine learning algorithms honed through years of anti-fraud experience in the financial industry. Thus, our FDS offers not just a line of defense but a strategic tool that aligns withIndonesia's strict financial regulations, ensuring that banks can maintain the highest standards of integrity and security in their operations.
Key Benefits of the Partnership
- Speed and pricing: The FDS's SaaS model ensures rapid deployment and cost efficiency
- Regulatory compliance: The system aligned with local and international standards, specifically adhering to 39/POJK.03/2019.
- Data Security: A commitment to data sovereignty and security is paramount, with a local data center setup in Indonesia.
Impact and Future Vision
Since its inception, the partnership has facilitated numerous banks with the deployment of the FDS. We have significantly mitigating fraud risks and enhancing their operational capacity. The long-term vision is to achieve widespread digital and financial inclusion across Indonesia—in line with TrustDecisions’ financial inclusion ethos. We aim to support the growth and resilience of the banking sector through continuous technological advancement and strategic collaboration. In conclusion, the partnership with Artajasa is not just a merger of two firms but a beacon of progress for the Indonesian financial sector, promising a safer, more efficient banking environment for all.
