LEGAL CHALLENGES OF THE DIGITALIZATION OF BANKING: REGULATORY GAPS, LIABILITY, AND THE RECONFIGURATION OF FINANCIAL LAW

Abstract

This article examines the principal legal challenges arising from the digitalization of banking from a comparative and doctrinal perspective. It analyses how four jurisdictions — the United States, the European Union, Singapore, and Uzbekistan — address the regulatory perimeter problem, the allocation of liability for cyber incidents and algorithmic decisions, the supervisory treatment of cloud and other critical third-party providers, and the protection of consumers in instant and cross-border digital transactions. The findings demonstrate that, although substantive obligations on cybersecurity, customer authentication, and information disclosure converge across the surveyed regimes, the institutional and doctrinal architecture for addressing emerging risks diverges significantly. Uzbekistan, having reinforced its framework through Law No. ZRU-578 of 2019, Presidential Decree No. PP-381 of November 2023, and Central Bank Regulation No. 3513 of May 2024, has achieved meaningful substantive alignment with international standards. However, the regime lacks codified rules on the oversight of critical third-party providers comparable to the EU's Digital Operational Resilience Act, a framework for the legal accountability of automated decision-making analogous to the EU Artificial Intelligence Act, and a specialised dispute-resolution mechanism for digital-banking disputes. The article argues that the next reform cycle should consolidate the legal infrastructure for operational resilience, algorithmic accountability, and consumer redress.