Effectiveness of the use of power of attorney to encumber mortgage rights by financial technology (fintech) companies in digital financing schemes

Abstract

This study examines the effectiveness of using a digital Power of Attorney to Encumber Mortgage Rights (SKMHT) by fintech companies in digital financing schemes by identifying the challenges of adapting traditional legal instruments to the dynamics of information technology, particularly concerning the validity of electronic documents and data security. The main issue faced is how to integrate electronic signatures and encryption technology in accordance with the provisions of the Electronic Information and Transactions Law (UU ITE), the Mortgage Rights Law, and the principles of the Indonesian Civil Code (KUHPerdata), while also meeting the supervisory standards set by the Financial Services Authority (OJK). The research method used is normative legal analysis, involving a literature review of relevant laws and legal documents to understand the regulatory framework underlying the implementation of digital SKMHT. The findings indicate that with the adoption of advanced technologies such as data encryption and blockchain, along with the harmonization of traditional and digital legal regulations, the implementation of digital SKMHT can enhance security, transparency, and legal certainty in digital financing transactions.