OJK Prepares New Rules on AI-Based Credit Scores

The Financial Services Authority (“OJK”) will soon update Regulation of OJK No. 5/POJK.03/2022 of 2022 (“Regulation 5/2022”) on the Credit Information Management Agency (“LPIP”). One of the key focuses of the update will be to require LPIPs to use artificial intelligence (“AI”) systems to ensure accountability and to implement the algorithms behind consumer credit scores. 

“This Draft Regulation of the OJK (“Draft Regulation”) will replace Regulation 5/2022 to accommodate developments in the digital ecosystem and the use of alternative data,” said Chief Executive of Banking Supervision of the OJK, Dian Edina Rae. 

The provisions of this Draft Regulation are in line with the OJK’s efforts to collect data beyond conventional banking data (the Financial Information Service System - “SLIK”) to provide a more comprehensive risk profile. This enables the unbanked population to obtain creditworthiness assessments based on other financial behaviors.