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This article explores the fusion of Artificial Intelligence (AI) with Financial Technology (FinTech) within European financial integration, examining its multifaceted challenges and prospects.The article posits that integrating AI in FinTech in Europe is a complex but crucial endeavor.It involves not only technological innovations but also requires comprehensive strategies to address data governance, privacy, ethical AI practices, and socio-economic challenges.The incorporation of AI signifies a paradigm shift across social, economic, cultural, and financial dimensions within the rapidly evolving landscape of European Union (EU) financial systems.At its core, AI stands to fundamentally alter the European financial sector, enhancing efficiency, accuracy, and innovation.Applications span from automated customer service to intricate risk assessments and robust fraud detection, promising a new era of inclusive and sophisticated financial services.However, transitioning towards AI in FinTech presents challenges, notably regulatory compliance, data privacy, and ethical considerations.Ensuring adherence to EU regulations, especially within heavily regulated financial markets, while navigating evolving laws poses a significant challenge.Data privacy, governed by regulations like GDPR, emerges as a critical concern due to the scale of data involved in AI-driven services.Algorithmic transparency is essential for maintaining trust and accountability.The article also addresses cross-border data transfer, financial inclusion, cybersecurity, bias and fairness in AI algorithms, intellectual property, economic disparities, interoperability, consumer trust, and ethical considerations.These 754 challenges are analyzed through various metrics, stressing the need for balanced responses.Despite challenges, AI in FinTech within Europe presents numerous opportunities.AI can revolutionize cross-border transactions, enhance fraud detection, personalize banking services, facilitate regulatory compliance, democratize financial services access, and foster sustainable finance, aligning with global economic and sustainability goals.However, managing these prospects requires careful handling of cyber risks, the evolving regulatory landscape, technical vulnerabilities, and broader socio-economic impacts.
Токар et al. (Mon,) studied this question.