Digital Banking Transformation and Consumer Protection: A Legal-Economic Review
Keywords:
Digital Banking, Consumer Protection, Legal Economics, Financial Stability, Regulatory Governance.Abstract
Digital banking transformation has fundamentally reconfigured the architecture of financial intermediation by integrating artificial intelligence, blockchain-based infrastructures, and data-driven platforms into core banking operations. While these innovations enhance efficiency and financial inclusion, they simultaneously intensify information asymmetries, algorithmic opacity, cybersecurity exposure, and cross-border enforcement challenges that recalibrate consumer vulnerability. This study develops a legal–economic review to examine how emerging technological risks intersect with consumer protection regimes and systemic financial stability. By synthesizing interdisciplinary scholarship on AI governance, crypto-asset regulation, proportionality doctrine, and digital dispute resolution mechanisms, the analysis demonstrates that fragmented regulatory responses amplify uncertainty and erode institutional trust. The paper advances an integrative framework that positions dispute resolution design and proportional regulatory calibration as mediating variables linking micro-level consumer rights to macro-level economic stability. The findings argue that sustainable digital banking ecosystems require embedded accountability architectures, coherent supervisory harmonization, and economically rational enforcement strategies capable of internalizing technological externalities without suppressing innovation
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