Artificial intelligence (AI) and financial technology (FinTech) in Tanzania; legal and regulatory issues

Purpose This paper aims to investigate the legal challenges arising from the increasing integration of artificial intelligence (AI) within the financial industry. It examines issues such as data privacy, cyber security, fraud and consumer protection, as well as ethical concerns like algorithmic bias, fairness and transparency. The study explores ways to create a regulatory environment that supports innovation while ensuring financial stability and consumer protection. It also examines the impact of FinTech innovations, such as mobile banking and block chain, on Tanzania’s legal landscape, providing recommendations for adapting laws to better manage AI and FinTech integration. Design/methodology/approach The study adopts a doctrinal legal approach and comparative analysis to assess Tanzanian laws, identifying gaps and proposing solutions. It draws on international legal frameworks and applies both deductive and inductive reasoning, alongside key rules of statutory interpretation, including the mischief rule, literal rule, golden rule and purposive approach. Key Tanzanian laws, such as the Cybercrime Act (2015), the Electronic Transactions Act (2015), the Personal Data Protection Act (2022) and the National Payments System Act (2015), are critically examined. Comparative analysis with international legal standards further highlights areas for improvement and opportunities for legal harmonization. Findings The study revealed that the existing legal instruments in Tanzania, such as the Cybercrime Act 2015, Electronic Transaction Act 2015 and others, are inadequate in addressing the specific legal challenges posed by AI and FinTech. There is a significant need for specialized legal frameworks that facilitate financial inclusion in the digital economy and protect consumers from potential financial risks associated with emerging technologies. The integration of AI and FinTech has democratized access to financial services but has also introduced unforeseen legal complexities and regulatory gaps. Originality/value This paper presents an in-depth analysis of the impact of AI on Tanzania’s financial sector. Its originality and value stem from its focused exploration of AI’s influence on FinTech, detailed legal analysis and practical legislative reform recommendations. The discussion provides insights into the local legal framework and its preparedness to handle the complexities introduced by AI and automated contracts. This localized analysis fills a significant gap in the literature, offering valuable information for policymakers and scholars interested in FinTech. The paper contributes to the discourse on digital economy regulations and the adaptation of legal frameworks to emerging technologies.