The Impact of Digitalisation and AI Application in Capital Markets – Legal Challenges and Regulatory Responses

Sovilj, Ranko and Vukadinović, Aleksandar (2025) The Impact of Digitalisation and AI Application in Capital Markets – Legal Challenges and Regulatory Responses. In: Digitalization and Society - Interdisciplinary Conference on the Challenges of the Digital Society. University of Miskolc – Faculty of Law, Miskolc, pp. 36-46. ISBN 978-963-358-431-6

Text Sovilj & Vukadinović - The Impact od Digitalisation and AI Application in Capital Markets.pdf - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (272kB)

Abstract

The impact of technological advancements on international capital markets has profoundly transformed the legal landscape, introducing both new opportunities and significant challenges for regulators, market participants, and governments. Technologies such as digitalization, automation and the application of artificial intelligence have become a crucial catalyst in the transformation of modern capital markets, highlighting the increasing prominence of technology-driven financial instruments.2 The legal implications of digitalization in capital markets are a growing area of interest as technological advances increasingly impact capital markets around the world. The transition to digitalization offers a range of opportunities but also imposes complex challenges related to regulation, compliance, transparency, and the preservation of stability and fairness in capital markets. Therefore, this paper examines the pivotal role of law in regulating innovative financial technologies in modern capital markets with a particular focus on the evolving legal and regulatory frameworks necessary to address these advancements. Emerging technologies like artificial intelligence, big data, blockchain, machine learning, and Internet of things have brought new possibilities for improving financial services in general, and for advancing digital and green finance in particular. One of the major challenges faced by digital finance initiatives is participation from the private sector. International financial organizations are increasingly focused on fostering private sector engagement and securing investments to support the mainstream adoption of digital finance. The integration of advanced technologies into these initiatives has proven to be a critical mechanism in this regard. However, while the application of such technologies offers numerous advantages, it simultaneously introduces a number of associated risks and challenges that must be carefully managed in the context of evolving regulatory frameworks.3

Actions (login required)

View Item