Evaluating the Effectiveness of Financial Technology Regulations in Addressing Illegal Online Lending

Abstract

Illegal online lending has become a significant challenge in Indonesia’s digital financial ecosystem because it combines financial misconduct with cyber law and information security risks. This article examines two main questions: to what extent existing financial technology lending regulations are effective in addressing illegal online lending practices, and why these regulations need to be examined and strengthened from a cyber law and information security perspective. Using a normative legal approach, this study analyzes Financial Services Authority Regulation No. 77/POJK.01/2016, relevant legal principles, peer-reviewed studies, and selected reported cases from reputable news sources. The discussion shows that the regulation has established an important legal foundation through registration, licensing, supervision, risk mitigation, confidentiality, and user protection requirements. However, its effectiveness remains limited because illegal platforms often operate outside the formal licensing system, misuse personal data, and conduct intimidation-based debt collection. The article argues that regulatory strengthening is necessary through stronger enforcement coordination, clearer data protection standards, platform accountability, victim remedies, and integration between financial supervision and cyber law enforcement.