AI, Fintech, and the Evolving Regulation of Consumer Financial Privacy

Abstract

One of the most notable developments in financial markets over the last 50 years is the growth of digital technology—a trend often referred to as “fintech.” This chapter examines fintech through the lens of consumer financial privacy, focusing on the implications of artificial intelligence (AI) and increasingly data-driven consumer finance for consumer privacy, and its regulation. It makes two principal contributions. First, taking a historical perspective, it examines the evolution of consumer financial privacy and its regulation under English law, from the duty of bank confidentiality to cross-sectoral data protection regulation. It demonstrates that this evolution has been shaped directly by the rise of fintech. Second, the chapter analyses the latest phase in fintech—AI- and data-driven decision-making—and examines the opportunities and challenges that this presents for the regulation of consumer financial privacy. Although the chapter focuses on English law, it will also be relevant to other jurisdictions that are grappling with the challenge of regulating consumer financial privacy in the age of AI.

Keywords: Financial privacy, data protection, GDPR, consumer protection, fintech, artificial intelligence, machine learning

JEL Classification: K2, G2, G3