Artificial Intelligence and Machine Learning in Banking: A Legal Perspective

Abstract

Artificial Intelligence (AI) and Machine Learning (ML) are rapidly transforming the banking sector, bringing significant efficiency gains, fraud detection capabilities, and tailored customer experiences. Nevertheless, this integration also brings about new legal intricacies. This blog explores the burgeoning application of AI and ML in banking through a legal lens. We explore the regulatory environment, examining how current frameworks address challenges such as data privacy, algorithmic bias, and accountability concerning decisions driven by AI. The article further explores challenges concerning explainability of AI models and potential consumer protection concerns arising from their use. By critically examining these issues, we aim to illuminate a path towards responsible and legally compliant adoption of AI and ML in banking, fostering financial innovation alongside robust legal safeguards.