JAKARTA. The number of Suspicious Activity Reports (SAR) within the banking sector increased 48.8% year-on-year (yoy) from 3,068 cases in 2021 to 4,556 cases in 2022. It was the most significant increase compared to other financial sectors.

Based on the SAR record from the Indonesian Financial Transaction Reports and Analysis Centre (INTRAC) throughout January-December 2022, it was revealed that there were 1,096 cases in the capital market and 2,484 cases in the insurance segment. Then, the accumulated SAR from those three financial sectors reached 8,252 cases, worsening 68.2% from 4,904 cases seen in 2021.

Dian Ediana Rae, Executive Head of Banking Supervisor of the Financial Services Authority (OJK), claimed that the increase of SAR in the banking sector is rooted from various factors. One of them is how the red flag indicators that are owned by banks, which could detect any suspicious financial transactions from money laundering to terrorism support funds, are more sensitive.

“Another common factor is these banks fear getting fined or sanctioned,” Rae explained more last week. Then, Rae said these SARs were most likely low in quality and did not signal actual crime. Following this significant increment, OJK plans to handle the issue through improving regulation, supervision, and inspection of banks’ antifraud and anti-money-laundering/terrorism support fund programmes. (AM/ZH)