Regulatory Oversight of FinTech in the Era of Artificial Intelligence: Assessing Consumer Risks in Tanzania's FinTech Sector

Abstract

 The rapid evolution of Financial Technology (FinTech) is significantly transforming the financial sector, filling gaps traditionally left by conventional banks. This transformation is expanding access to formal financial services, fostering economic growth and reducing poverty in Tanzania. Despite its substantial growth, the FinTech industry in Tanzania operates without a comprehensive legal and regulatory framework, thereby exposing consumers to unforeseen risks. This paper examines the legal and regulatory challenges stemming from the integration of Artificial Intelligence (AI) and Machine Learning (ML) in the financial industry. To address these issues, this study employs doctrinal legal methods and a comparative study approach. It draws insights from international legal instruments, policies, and laws of other jurisdictions to identify legal gaps and propose solutions. The study utilises deductive and inductive reasoning for data analysis, applying statutory interpretation rules to evaluate Tanzanian laws and identify existing gaps. Furthermore, the Ejusdem Generis rule is employed to assess the legal landscape and challenges associated with AI adoption. Key Tanzanian laws and Regulatory bodies are scrutinised to pinpoint regulatory shortcomings. This study identified deficiencies and provide recommendations to enhance FinTech security in Tanzania.