Legal Accountability for Artificial Intelligence in Financial Services: Consumer Protection and Regulatory Challenges in Indonesia

Abstract

The increasing use of artificial intelligence (AI) in financial services raises legal challenges concerning accountability, algorithmic transparency, and consumer protection. This study examines how Indonesian law addresses responsibility for AI-driven financial decisions, the safeguards available to consumers, and the regulatory measures needed to strengthen legal accountability. It employs normative legal research using statutory and conceptual approaches, supported by documentary analysis of legislation, regulatory instruments, and scholarly literature. The analysis indicates that AI-related accountability requires more than identifying technical errors; it involves assessing applicable legal duties, the roles of relevant actors, the potential harm suffered, and the availability of effective remedies. Consumer protection also depends on accessible explanations, appropriate human review, reliable data, and effective complaint-handling procedures. However, the interaction between general legal obligations and AI governance arrangements presents challenges in determining responsibility and ensuring enforceable safeguards. This study proposes an integrated analytical framework comprising three dimensions: allocation of legal responsibility, algorithmic transparency and safeguards, and consumer redress. The framework provides a structured basis for evaluating existing legal instruments and identifying areas requiring regulatory clarification. It contributes to normative legal scholarship by connecting AI accountability with enforceable consumer protection, while recognizing that the practical effectiveness of the proposed framework requires further empirical assessment.