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Procedure Consumer Due Diligence for Fintech Company

“Customer Due Diligence (CDD) is activities conducted by Financial Service Provider to ensure the
transaction by the profile, characteristic, and/or transaction patterns of customers.”

Customer Due Diligence (CDD) is activities (identification, verification, and monitoring) that conducted by Financial Service Provider (“Penyedia Jasa Keuangan” or “PJK”) to ensure the transaction in accordance with the profile, characteristic, and/or transaction patterns of prospective customer, customer, or walk-in customer (“customers”).  Furthermore, Financial Service Authority (“Otoritas Jasa Keuangan” or “OJK”) has stipulated the CDD provisions on OJK Regulation No. 12/POJK.01/2017 (“POJK 12/2017”) and its amendment on 23/POJK.01/2019 (“POJK 23/2019”) of Implementation of Anti Money Laundering and Counter Financing of Terrorism in the Financial Service  Sector. The regulations apply to all PJK’s sector, including the peer to peer lending provider (P2P) in Non-Bank Financial  Service Industry and Financial Digital Innovation.

The Procedure of Consumer Due Diligence (CDD)

The CDD activity has started with the identification of customers through verification of customer’s information and documents. The information and documents can be found in the following table:

Furthermore, the accuracy of information and documents must be verified directly to consumers through face to face meet up. Otherwise, the meet up can be substitute by verification through PJK or third party’s electronic facilities with approval from OJK. For example, an electronic facility is video banking conducted by Bank for online services.

The face to face procedure can also be excluded with the verification process through PJK (including fintech) or consumer’s electronic facilities. Verification must be conducted with resident’s data, 2 (two) authentication factors, which are: (i)  what you have (E-KTP) and (ii) what you are (biometric data, fingerprint).

Identification and Verification of Beneficial Owner (BO)

Beside of verification of information and documents above, PJK (including fintech) must identify the beneficial owner of the consumers. The identification can be conducted by BO’s information and documents identity request, the legal relation between consumers and BO (an agreement, power of attorney, letter of assignment, or other types), statement from consumers about the truth of BO’s identity and source of funds, and for business/legal entity, identification of management if there is no individual can be identified as BO.

Moreover, if PJK is doubt the BO’s identity, PJK is obligate to refuse the transaction or business relationship.

Consumer DueDiligence (CDD) by Third Party

PJK (including fintech) can utilize CDD result by the third-party towards the consumers that have been a consumer in the said third party. The third-party was a financial institution and/or service and specific profession that have CDD procedure under the supervision of authorized authority. PJK must have a written agreement with the third party and ensure that third party willing to provide information and documents immediately if needed by PJK, in the event of implementation of anti-money laundering and counter financing of terrorism. However, the responsibility of CDD remains with the PJK (not the third party).

Author: Kristalia Andiani Puteri

Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include capital market and financial services.

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