Big Data Applications in Monetary Policy and Financial Stability for SEACEN Member Economies: The Case of Bank Indonesia

Bank Indonesia

in Research Studies from South East Asian Central Banks (SEACEN) Research and Training Centre

Abstract: Big Data analytics play an important role in today’s digital era, including the support of the formulation of both monetary and macroprudential central bank policies. In addition, the central bank also utilises Big Data for the supervision and regulation of the financial system, such as the application of supervisory technology (SupTech) and regulatory technology (RegTech). The COVID-19 pandemic, which rapidly changed the behaviour of economic agents and companies, has accelerated the important role of Big Data analytics. In the Asia-Pacific region, some central banks have taken advantage of Big Data analytics, particularly for macroeconomic projections and financial supervision. Bank Indonesia, as a member of SEACEN, has developed and utilised Big Data analytics through 40 pilot projects since 2015 to strengthen the process of formulating monetary, macroprudential and payment system policies. But the development of Big Data analytics is still faced with a number of challenges, such as the availability and quality of the infrastructure, a lack of experts and unclear legal requirements, as well as the security of its use. Going forward, the development of Big Data analytics needs to be directed towards sharpening granular data use cases, improving data quality and coverage, increasing human resource capabilities, expanding data acquisition collaboration with various parties, more forward-looking analysis coverage and developing new indicators.

Date: 2023
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