Risky Business: Legal Implications of Emerging Technologies Affecting Consumers of Financial Services

Abstract

Artificial Intelligence- (AI) driven Big Data analytics are becoming a core capability for financial institutions, giving rise to promises of profits and increased efficiency both for new FinTech firms and incumbent institutions. This, however, may come at a cost to consumers. This chapter analyses the challenges to legal and regulatory framework applicable to provision of financial services to consumers brought about by the use of AI and Big Data tools by financial services firms. We discuss harms to consumers potentially arising in terms of discrimination, privacy breaches, digital manipulation and financial exclusion, and argue policymakers and regulators must deliver a fit-for-purpose legal and regulatory framework, allowing both financial firms and consumers to reap benefits of the technological revolution.

Keywords: Artificial Intelligence, Big Data, Financial Services, Consumer Protection, Consumer Harms, Law, Technology

JEL Classification: K23, K29