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Compliance Due Diligence Advisory for Indonesian P2P Lending Company

Compliance Due Diligence, Fintech Financial Technology

As part of its strategic risk management and regulatory compliance initiative, some prominent Indonesian P2P Lending Companies engaged MSS & Associates to undertake a comprehensive Compliance Due Diligence review. This review comes at a pivotal time, following the issuance of new OJK regulations that significantly impact the operational and governance standards of entities operating within the peer-to-peer lending ecosystem, especially aiming to mitigate the risk of misconduct that shall become ground of the regulator to impose sanction that can lead to losses up to billions IDR or worse, a revocation of license before reaching return on investment.

Regulatory Background

Since obtaining the operational license from the Financial Services Authority (OJK), the Indonesian P2P Lending Company has been subject to evolving regulatory standards. The regulatory framework mainly includes:

  • POJK on Information Technology-Based Joint Funding Services (LPBBTI);
  • POJK on Anti-Money Laundering (AML), Counter-Terrorism Financing (CTF), and Counter-Proliferation Financing;
  • POJK on Consumer and Community Protection.

These frameworks are complemented by derivative regulations issued by other ministries and agencies, making regulatory compliance increasingly complex and vital.

Objective of the Compliance Due Diligence

The primary aim of the compliance due diligence is to:

  • Assess the Indonesian P2P Lending Company’s adherence to financial sector regulations, including AML and CTF obligations, consumer protection, and the most importantly the product and operational of the Company based on the regulation on LPBBTI from time to time since the Company start commercially operating;
  • Identify any compliance gaps and assess related risks;
  • Recommend actionable improvements to strengthen the company’s regulatory posture and prevent reputational or financial loss.

The Compliance Due Diligence also function as internal initiative that reflects the Client’s commitment to proactive governance and regulatory integrity which becomes one of key elements to further maintain investor trusts.

MSS Scope of Work

The due diligence will cover the following core areas:

  • General regulatory awareness and compliance training practices;
  • Compliance with Anti-Money Laundering and Counter-Terrorism Financing regulations;
  • Data privacy and protection obligations;
  • Industry best practices across internal operations and third-party engagements.

Standard Methodology

The review will be conducted using a structured and consultative methodology, including:

  • Document Review: Analysis of policies, procedures, compliance reports, and training materials;
  • Stakeholder Interviews: Dialogue with compliance officers, division heads, and relevant personnel;
  • On-Site Inspections: Direct assessment of operational practices and internal controls (if applicable).

MSS Deliverables

Upon conclusion of the due diligence, MSS will deliver:

  1. Comprehensive Report – Highlighting regulatory gaps, risk areas, and tailored recommendations;
  2. Executive Summary Presentation – For senior management, outlining key findings and strategic implications;
  3. Action Plan – A practical, phased roadmap categorizing recommendations into immediate, short-term, and long-term measures, with assigned responsibilities.

Project Timeline

The project is set to span around 3-5 months, with key milestones as follows:

Activity
Project kickoff, document collection, stakeholder interviews
Data analysis and on-site verification
Initial assessment report preparation
Report refinement and action plan development
Final presentation to management and stakeholders

Note: The timeline may adjust based on documentation availability and stakeholder responsiveness.

Roles & Responsibilities

  • Client Project Lead: Client’s compliance or legal staff (overall coordination)
  • Legal & Compliance Team: Providing access to internal policies and key records
  • All Divisions: Supporting information requests and internal alignment
  • MSS: Legal due diligence, analysis, and reporting

Confidentiality Assurance

All information accessed in the course of this engagement will be handled with the strictest confidentiality and used solely for the purpose of this due diligence review.

For further inquiries about legal and compliance advisory services in the fintech sector, contact us at:

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