BANKING is considered necessary to return the profits obtained from online gambling transactions (judol) to the state. President Director of the Center for Banking Crisis (CBC) Achmad Deni Daruri said that to stop online gambling in Indonesia, banking needs to close the online gambling payment system.
“The way to destroy judol is very easy because online gambling and other business activities run the principle of bank follows the trade. If you want to destroy judol activities, destroy the payment system that supports it. Namely, banking and non-bank financial institutions,” said President Director of the Center for Banking Crisis (CBC) Achmad Deni Daruri through his press release in Jakarta, Tuesday (9/7).
So far, Deni said, Bank Indonesia has made it easier for online gambling players to transact in banking. Meanwhile, the Financial Services Authority (OJK) as the banking supervisor, seems to be neglectful.
“Recently, to combat online gambling activities, OJK instructed banks not only to block accounts, but also to return bank profits obtained from these transactions,” he said.
The establishment of payment services by online gambling owners, he said, can be seen as a strategy to facilitate large and frequent financial transactions. This is a common characteristic of the judol industry.
By having their own payment service, judol owners can reduce their dependence on external payment service providers who may have transaction limits, or high fees.
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“In addition, by having an internal payment system, they can have greater control over the transaction process, including the speed and security of fund transfers,” said Deni.
From a banking perspective, he continued, cooperation with judol’s payment services might pose reputational and legal risks. Given that judol often finds itself in a legal gray area.
Banks may see potential profits from the high transaction volumes generated by this industry. Therefore, banks should conduct careful risk assessments and ensure that they comply with all applicable regulations before working with such payment services.
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In the future, he said, both OJK and BI are required to conduct investigative audits on banking and non-bank financial institutions suspected of being involved in judol, which until now has not been carried out routinely on financial institutions.
Judol special investigative audits enable financial institutions to examine weaknesses in their internal control systems, so they can take preventive measures to reduce the risk of a violation occurring.
To prevent judol owners from having payment services, Deni proposed a number of things. First, increasing cooperation between government institutions, such as the Ministry of Communication and Information (Kominfo), OJK, and the Financial Transaction Reports and Analysis Center (PPATK). It is important to identify and block transactions related to online gambling.
Also read: Online Gambling Task Force Needs to Immediately Investigate Money Flow in Banking
Second, he continued, the implementation of stricter regulations on financial institutions and electronic payment services to ensure that they do not process transactions related to online gambling.
“Third, the use of data analysis technology and artificial intelligence to detect suspicious transaction patterns that may be related to judol,” said Deni.
Fourth, he continued, blocking access to online gambling sites by Kominfo must continue to be improved, including cutting off access to newly identified sites. Fifth, stricter law enforcement once morest online gambling perpetrators, including payment service providers involved.
“Sixth, public education regarding the risks and negative impacts of online gambling, as well as how to report suspicious activities,” he said.
Seventh, encourage financial institutions to report suspicious activities to PPATK and take preventive measures such as closing accounts involved in online gambling. Eighth, strengthen international cooperation to deal with online gambling sites that operate across countries.
Ninth, continued Deni, improve and strengthen banking regulations to prevent bank accounts from being used as a means for online gambling.
“Tenth, increase awareness and technical skills of workers in the banking and financial sector to recognize and handle transactions related to judol,” he explained.
In addition, Deni said, Bank Indonesia is more careful so as not to be caught out, giving permission to payment service providers owned by judol entities. First, understanding the applicable regulations in depth is key.
“BI has set strict regulations related to the granting of licenses for payment system service providers, including prudence and obligations for Anti-Money Laundering and Prevention of Terrorism Funding (APU-PPT). Including implementing the Know Your Customer (KYC) principle,” concluded Deni. (Z-8)
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