THE ETHICAL AND SOCIAL IMPLICATIONS OF ARTIFICIAL INTELLIGENCE IN FINANCIAL INCLUSION

Tudor Ciumara
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Tudor Ciumara: Centre for Financial and Monetary Research “Victor Slavescu”, N.I.E.R., Romanian Academy, Bucharest, Romania

Journal of Financial and Monetary Economics, 2024, vol. 12, issue 1, 188-194

Abstract: Artificial Intelligence (AI) is transforming the financial sector by enhancing risk assessment, automating decision-making, and expanding access to financial services. While AI holds promise for improving financial inclusion, it also raises significant ethical and social challenges. Based on a theoretical approach, this paper examines key concerns such as algorithmic bias, data privacy risks, lack of transparency, digital inequalities, and job displacement, which can inadvertently reinforce financial exclusion rather than reduce it. Additionally, it explores potential solutions, including regulatory frameworks, explainable AI (XAI), enhanced data protection, digital literacy programs, and workforce reskilling initiatives. Responsible AI implementation, guided by regulatory oversight and ethical design principles, can foster an inclusive and sustainable financial ecosystem. The study highlights the need for stronger regulations, public-private partnerships, and international cooperation to ensure that AI-driven financial services benefit all socio-economic groups equitably.

Keywords: financial inclusion; AI ethics; algorithmic bias; data privacy; AI transparency (search for similar items in EconPapers)
JEL-codes: D63 G28 Q33 (search for similar items in EconPapers)
Date: 2024
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