Abstract

The paper explores whether AI-powered “regulators” can autonomously enforce compliance in financial technology (fintech), focusing on the legal and operational implications of delegating regulatory authority to algorithms. It starts with an overview of the origin and background of the use of Artificial Intelligence in the Fintech sector. After that, the paper delves into understanding key concepts such as Autonomous compliance, AI Regulators, etc. The paper then examines the legal implications, including frameworks for algorithmic accountability, liability attribution, and the legal personality of AI systems. The study then highlights the benefits, as well as challenges, of delegating AI in the Finance sector. A comparative review of global regulatory approaches—such as OECD principles, risk-based frameworks, and regulatory sandboxes—underscores the need for international collaboration. The paper then concludes with recommendations for ethical and responsible integration of AI in fintech regulation and compliance.

Keywords: Artificial Intelligence, Fintech Sector, AI Regulators, European Union, Legal Personality of AI

AI in Financial Technology (Fintech)

The usage of Artificial Intelligence (AI) in financial technology can be described as nothing short of revolutionary. With advanced algorithms and machine learning, AI systems are automating financial processes by streamlining multiple tasks, increasing efficiency, and reducing manual efforts. AI has enabled better personalisation in financial services, tailoring recommendations and offerings to each customer’s unique needs and preferences, such as the services of chatbots, which are powered by AI and provide 24/7 customer support by engaging in natural-language conversations, delivering instant responses to inquiries and issues.

Artificial Intelligence algorithms are also used in analysing customer data, subsequently identifying spending habits and financial transactions, predicting future financial behaviour, and offering personalised financial recommendations. 

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