REGULATION AND ETHICS: A CRITICAL REVIEW OF THE EFFECTIVENESS OF THE FINANCIAL SERVICES INDUSTRY CODE OF ETHICS IN CONSUMER PROTECTION

Abstract

This study critically analyzes the effectiveness of OJK regulations and codes of ethics in the Indonesian Financial Services Industry (IJK), particularly in protecting consumers. OJK regulations serve as minimum standards that must be adhered to, while codes of ethics serve as independent guidelines for higher standards of professional behavior. The study uses an exploratory qualitative approach to examine the implementation and success rate of both, as well as the regulatory oversight role. The results show that OJK regulations, such as the POJK on Digital Financial Innovation, encourage fintech growth, but their implementation still faces various obstacles. Codes of ethics play a significant role through ethics committees, training, and whistleblowing mechanisms (e.g., Bank Muamalat and CIMB Niaga), but their effectiveness will be reduced if they are merely considered formalities, as evidenced by practices that harm consumers. Strengthening ethics requires strong leadership, ongoing education, and a balanced system of rewards and sanctions. The OJK, through Law No. 21/2011 and POJK 12/2024, is crucial in strictly enforcing regulations and raising ethical awareness. Conclusion: The synergy between regulations, strict sanctions, and whistleblowing mechanisms can strengthen an ethical culture, reduce systemic risk, and increase public trust, as evidenced by the declining trend in GCG Violations