The Algorithmic Alchemy: Synthesizing Global Legal Frameworks For Artificial Intelligence In Financial Services

This study examines and recommends regulatory and liability frameworks for the use of artificial intelligence in financial sector. Algorithmic bias, the black-box aspect of AI, data privacy concerns, and unequal treatment are the primary focus of this study. It employs normative, comparative, and empirical juridical analyses by assessing at AIrelated laws and cases, comparing AI governance models across jurisdictions, and undertaking focus group discussions with academics, industry stakeholders, and regulators. For the comparative analyses the study evaluates the regulatory models and AI-related cases in the European Union, the United States, Singapore, Australia, China, and Qatar. The result shows Indonesia should use a hybrid model that begins with an adaptive sandbox phase, moves toward a risk-based framework to balance innovation and responsibility, and subsequently transitioning to a co-regulatory model as AI utilization escalates. Additionally, considering that AI is a non-legal subject, the proposed Clear Box Liability framework puts a strong emphasis on human accountability through proportional liability principles. Furthermore, the FairSight Liability Model strengthens consumer protection, transparency, and effective dispute resolution in AI-driven financial services by integrating fairness and foresight.