ViPP Series

Alternative Credit Scoring Regulatory Framework: Comparison Between Indonesia and Korea

This research explores the regulatory frameworks for alternative credit scoring (ACS) in

Indonesia and South Korea. In Indonesia, the significant unbanked population underscores the

need for ACS to assess creditworthiness using alternative data sources such as utility payment

records, telecommunications data, social media activity, e-commerce transactions, and other

behavioral indicators. In contrast, South Korea’s mature credit information system incorporates

innovative frameworks such as MyData services, Data Agencies, multi-licensed credit bureaus,

and a well-integrated open banking network to address the needs of thin-file individuals.

A comparative analysis reveals key differences in the regulatory approaches of both countries,

including business activities, licensing processes, data management practices, the role of

intermediary agencies, regulatory oversight, consumer consent mechanisms, and conditions for

consumer rights and compensation. The study identifies gaps in Indonesia’s ACS regulatory

framework, particularly in its data infrastructure and consumer protection measures. Drawing

lessons learned from Korea’s practices, the research recommends the establishment of an

intermediary entity to securely combine datasets, mandatory notifications to enhance

transparency when consumer data is shared, and stronger consumer rights, including mechanisms

for data control and compensation for misuse or breaches.

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