Fintech, the threat of technology in the conventional financial system

This study centred on the effect of technology on conventional payment methods and their consequences for society. Considering the presence of digital currencies, also known as cryptocurrencies, used in transactions through financial technology (fintech), this study could serve as a basis for developing laws and regulations governing fintech. The purpose of this study was to offer a clear and specific understanding of the legitimacy and societal advantages of fintech in Indonesia. This study employed regulatory research methodology, incorporating socio-legal techniques, legislative analysis, and examination of legal concepts. The findings of this study have effectively achieved three fundamental criteria in the use of fintech: assurance, benefit, and fairness. The regulations on fintech are outlined in Bank Indonesia Regulation No. 19/12/PBI/2017, Financial Services Authority Regulation No. 77/POJK.01/2016, and Law No. 8 of 1999, which also address matters related to consumer protection. From a sociocultural standpoint, fintech embodies a technologically- driven revolution that fosters societal development. Fintech endeavours to offer benefits to the public through facilitating electronic financial transactions. It was emphasised that fintech plays a crucial role in reshaping society by revolutionising how people interact with finances. A key aspect of this transformation is the shift away from conventional payment methods towards digital alternatives. It is essential for both consumers and fintech companies to understand and follow legal requirements when implementing fintech solutions, as adherence to regulations is critical. Failure to uphold ethical standards within the fintech industry can hinder its widespread adoption and lead to negative consequences. Understanding the potential threats posed by fintech to the conventional financial system will allow financial institutions and regulators to develop effective risk management strategies