Exploring the Lived Experiences of Financial Regulators Managing Innovation and Prudential Oversight

Abstract

In the evolving landscape of financial governance, regulators face increasing challenges in managing the balance between innovation and prudential oversight. While prior studies have examined structural and institutional aspects of digital financial regulation, little is known about how regulators personally interpret and experience their roles within these complex environments. The present study addresses this gap by asking: how do financial regulators experience the tension between encouraging digital innovation and maintaining financial stability? Focusing on the Southeast Asian context, particularly within central and supervisory financial institutions in Indonesia, this study explores the lived experiences of seven senior financial regulators through in-depth semi-structured interviews. The analysis revealed four central themes: the burden of dual mandate, regulatory ambiguity, institutional pressure, and moral responsibility. These findings demonstrate that regulatory work is deeply interpretative and emotionally complex, shaped not only by formal mandates but also by ethical judgment and personal meaning-making. By uncovering the internal dynamics of regulatory decision-making, the study contributes to a more human-centered understanding of financial oversight. These insights highlight the need for institutional mechanisms that support reflective practice among regulators and suggest future research directions that integrate subjective experience into broader policy frameworks.