Abstract
Finance is one of the most globalised, digitised and regulated sectors of developed economies around the world. Today, Artificial Intelligence (“AI”) in finance has proved to be a powerful ally when it comes to automatically executing big volumes of trades in short timings, enabling frictionless, 24/7 customer service via chatbots, robo-advisors providing financial advice to investors, improving cyber resilience, enabling real-time and post-trade monitoring of client activities to detect fraud and money-laundering practices. Amidst all the buzz, the growing use of AI can result in potential economic and legal disruptions such as market volatility, anti-competition, market abuse practices and other types of financial loss or harm. Liability plays a prominent role, but the real challenge is the lack of a proper regulatory and governance landscape surrounding AI technologies in the New Zealand finance sector. My main argument will be focused on whether the existing legal instruments are sufficient to deal with the question of liability or whether improvements or adjustments are required. In addition, I shall analyse whether a preventive approach in terms of a compliance framework based on an assessment of risks is ideal to address this situation.