Legal Challenges and Opportunities for Digital Transformation of Credit Unions in the Digital Age

Arya Dewantara; Anggi Tri Puspasari; Callysta Nabila Nathaniayu; Jasmine Maulina Arifin Permata; Hendra Khayru Prasetyo; Fauzan Arya Pratama; Diana  Setiawati

Authors

Arya Dewantara Universitas Muhammadiyah Surakarta Author
Anggi Tri Puspasari Universitas Muhammadiyah Surakarta Author
Callysta Nabila Nathaniayu Universitas Muhammadiyah Surakarta Author
Jasmine Maulina Arifin Permata Universitas Muhammadiyah Surakarta Author
Hendra Khayru Prasetyo Universitas Muhammadiyah Surakarta Author
Fauzan Arya Pratama Universitas Muhammadiyah Surakarta Author
Diana Setiawati Faculty of Law and Political Science, Muhammadiyah University Surakarta Author

Keywords:

Digitization , Savings and Loan Cooperatives, Challenges and Opportunities

Abstract

Digitalisation opens up considerable opportunities for cooperatives to increase the efficiency, transparency and reach of their services. However, the use of digital technologies also brings with it complex legal and institutional challenges, especially for cooperatives that are not yet so advanced in terms of infrastructure, personnel or organizational management. Regulatory gaps and the limited ability of cooperatives to adapt to the digital age are the key issues that require in-depth analysis. The aim of this research is to examine the challenges and opportunities faced by savings and credit cooperatives in the digital age, especially from a legal and institutional perspective. The research uses a normative method with a legal and conceptual approach. The data were collected through a literature review of laws and regulations, scientific literature, and other relevant documents, and then qualitatively analyzed using a descriptive-analytical approach. The results show that the current regulations, in particular Law No 25/1992 on cooperatives, do not explicitly take into account the aspects of cooperative digitalisation. On the other hand, cooperatives are obliged to comply with the requirements of the ITE Act and the PDP Act, which require technological readiness and data security, which most cooperatives do not yet have. At the institutional level, the main challenges are the low digital skills of management, limited infrastructure and the lack of technical regulations to implement digital transformation. Nevertheless, with the support of government policies and the potential integration of cooperatives into the digital financial technology ecosystem, the opportunities for the digitization of cooperatives still remain promising.

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