Legal regulation of artificial intelligence in the financial services market: a comparative analysis

Abstract

The study aims to conduct a comparative analysis of the legal regulation of the use of artificial intelligence in the financial services market. The research was carried out based on empirical methods of comparison, description, interpretation, and theoretical methods of formal and dialectical logic. Particular scientific methods were used: legal-dogmatic and the method of interpreting legal norms. The financial services market is currently expanding access to finance. At the same time, the normative legal regulation of artificial intelligence technology (hereinafter referred to as AI) in the financial sector is rather fragmentary and declarative. The position is expressed that artificial intelligence in the financial services market can lead to systemic risks and the manipulation of such a market on trading platforms. It is argued that the development of artificial intelligence should adhere to regulatory goals related to market security, consumer protection, and market integrity. The authors highlight regulatory objectives and possible regulatory methods for peer-to-peer platforms that ensure equality and fair access to financial instruments. The results of the work were the justification for the need to use robotic consultants in the field of investment activities to provide consumers with access to financial services markets. It is shown that the current legal regime does not provide adequate protection for consumers of financial services in this regard. At the same time, the authors believe that artificial intelligence can be used as a form of RegTech (regulatory technology) to optimize compliance processes, thereby increasing competition in financial markets and benefiting consumers. However, such use may be contrary to the principles of confidentiality, data protection, and ethical considerations. The novelty of the work lies in the proposed basic guidelines for the development of detailed regulators for the certification of algorithms and digital platforms, for enhancing ex-ante and ex-post protection of individuals using robotic consultants, and for addressing the question of how individual rights such as privacy rights and data rights can be exercised.