Observer: Government needs to establish data protection standards for MSMEs

The government must establish standards that can be implemented by MSME players to protect the personal data of their customers.

Nailul Huda, Director of Digital Economy at the Center of Economics and Law Studies (Celios), believes the government needs to create personal data protection standards that are easily applicable for micro, small, and medium enterprises (MSMEs).

Nailul stated that such standards are necessary given the low level of literacy among MSME players regarding the risks of personal data misuse, ensuring that the provisions of the Personal Data Protection Law (UU PDP) can be effectively applied by business owners.

“The government must create standards that can be implemented by MSME players to protect the personal data of MSME customers, including technical guidelines for minimum security standards,” Nailul told ANTARA in Jakarta on Friday.

Furthermore, he noted that the government needs to provide free assistance or training and consider fiscal incentives to help MSMEs increase their data protection capacity.

He also encouraged large digital platforms, including marketplaces, to provide UU PDP compliance features so that MSMEs do not have to build entire data protection systems independently.

These efforts are considered vital because MSMEs do not only act as parties responsible for protecting consumer data, but also have the right to receive protection for their own data when operating on digital platforms.

According to him, MSME players are also vulnerable to becoming victims of data misuse, ranging from transaction and payment fraud to the use of data for illegal online loan applications.

Nailul assessed that there are challenges in implementing the UU PDP at the MSME level, including a lack of understanding of basic concepts such as data controllers and processors, limited human resources for cybersecurity, manual recording systems, and budget constraints for building better security systems.

“I believe the implementation of the UU PDP must be carried out immediately, accompanied by capacity building for MSME players, so that the UU PDP does not become an obstacle to MSME digitalisation,” he added.