A  Legal Analysis Of Artificial Intelligence (AI) Regulations: A Study Of Consumer Protection In The Banking Sector

M. Muslimin

Authors

M. Muslimin Faculty of Law and Politcal Science Author

Keywords:

artificial intelligence, consumer protection, banking sector, governence, legal effectiveness

Abstract

The development of artificial intelligence in the banking sector has driven improvements in efficiency and service quality, while simultaneously giving rise to legal risks for consumers. This research aims to analyze the forms of AI implementation in Indonesian banking services and to assess the effectiveness of the Financial Services Authority (Otoritas Jasa Keuangan/OJK) regulations in ensuring consumer protection. This study employs a normative legal research method with a qualitative approach through library research. The data are obtained from statutory regulations, OJK regulations and guidelines, as well as relevant scholarly literature. The findings indicate that the application of AI in credit analysis, electronic know-your-customer (e-KYC), biometric authentication, and chatbots has the potential to weaken customer protection due to the risks of algorithmic bias, the black box phenomenon, and vulnerabilities in personal data. The current OJK regulatory framework is considered ineffective because it remains fragmentary, is dominated by soft law instruments, and has yet to regulate substantive transparency standards and operational obligations for human oversight. This research also highlights the need for clearer, more specific, and more accountable regulations to ensure effective consumer protection in banking services that apply AI-based technologies.

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