Indonesia and Malaysia's Alternative Models of Dispute Resolution in the Financial Sector

Indonesia has established the Alternative Institution for Dispute Resolution in the Financial Services Sector, known as LAPS SJK. At the same time, Malaysia has formed the Ombudsman for Financial Services for a similar purpose. Both institutions serve as alternative dispute resolution mechanisms within the financial services sector, aiming to provide fair, efficient, and accessible solutions for financial disputes outside conventional judicial processes. This study examines the dispute resolution models implemented by LAPS SJK and Ombudsman for Financial Services, highlighting their similarities and differences. Additionally, it analyzes the procedural frameworks of both institutions to understand their operational mechanisms for resolving disputes effectively. This research adopts a normative approach and is descriptive. The authors employed a library research method, utilizing secondary sources such as legal documents, institutional regulations, and scholarly literature. Data analysis was conducted qualitatively, and conclusions were drawn using the deductive method to ensure a comprehensive understanding of both models. The findings indicate that LAPS SJK employs a dispute resolution model comprising mediation, arbitration, and binding opinions, whereas OFS utilizes negotiation, mediation, conciliation, and adjudication. The procedural framework of LAPS SJK adheres to its internal regulations, which are based on the Arbitration and Alternative Dispute Resolution Act. In contrast, the procedures under OFS follow the OFS Terms of Reference, grounded in the Financial Services Act 2013 and its related regulations. These differences reflect the distinct legal frameworks and institutional designs governing financial dispute resolution in both countries.