REGULATION OF ARTIFICIAL INTELLIGENCE IN FINTECH SECTOR: CHALLENGES AND OPPORTUNITIES IN INDONESIA

The rapid development of artificial intelligence (AI) has significantly influenced various sectors, including financial technology (fintech). In Indonesia, fintech innovations such as digital payments and wealth management are reshaping financial services. However, the regulatory framework for AI in this sector remains underdeveloped, creating both challenges and opportunities. This article explores the current state of AI regulation in Indonesia's fintech sector and examines the potential hurdles and benefits of implementing comprehensive AI regulations. Utilizing a normative juridical approach, the study integrates conceptual, statutory, and case-based analyses to provide a multidimensional understanding of the issue. The findings reveal several challenges, including algorithmic bias, data privacy concerns, and the complexity of ensuring transparency and accountability in AI-based decision-making. On the other hand, AI offers opportunities for increased efficiency, enhanced risk assessment, and improved financial services scalability. The article underscores the urgency of establishing specific regulations to ensure AI accountability and transparency while fostering innovation. Such measures will help Indonesia balance the benefits of AI integration in fintech with the need to safeguard legal and ethical standards.