Regulating AI in Fintech: Balancing Innovation with Consumer Protection
Main Article Content
Abstract
The creation of the regulatory and legal framework for leveraging Artificial Intelligence (AI) to improve the financial inclusion (access to finance) in financial services industries is the subject of this study. The author makes the case that market integrity, safeguarding customers, and marketplace safety should all remain the regulatory goals of the advancement of artificial intelligence. When it comes to utilizing Artificial Intelligence (AI) technology to spur innovation and enhance customer experiences, the Fin-Tech sector has led the way. Nevertheless, there are particular difficulties in making sure that these solutions powered by AI follow stringent compliance regulations given the banking sector's intense regulation. The paper discusses how Fin-Tech companies can use AI to improve the products and services they offer while proactively dealing with regulatory issues through examples and business insights. This study explores the complex regulatory environments that shape fintech developments, primarily emphasizing the need to find a careful balance between protecting consumer interests and promoting experimentation. This paper investigates critical actions meant to strengthen safeguards for customers by undertaking a thorough review of worldwide regulatory systems, including variances among countries and the crucial roles of government departments. The paper addresses how the investment advising gap can be closed and consumers can have access to financing in the second section by using AI to give them financial advice, similar to that given by Rob counsellors. In this sense, financial customers are not adequately protected under the current system. The author addresses how Reg-Tech, or artificial intelligence, might be utilized to automate regulatory processes in the third part of the paper. This will boost competitive in financial services and benefit customers. In order to improve access to financing, the author offers policy ideas as well as some guidelines for governance in the application of AI in the banking industry. The research on the future regulation of AI in the banking sector, innovations in government policies, and the development of cities can benefit from the conclusions of this work.