The impact of artificial intelligence in digital authentication based on RegTech: A systematic review

This review article explores the impact of Artificial Intelligence (AI) on digital authentication systems within Regulatory Technology (RegTech) frameworks. The objective of this study is to examine how AI impacts digital authentication processes, improves regulatory compliance, and addresses security challenges in the financial sector. As cyber threats and regulatory complexities increase, the need for robust authentication methods has become more critical, making AI-driven solutions a key component of modern RegTech systems. This paper employs a systematic literature review methodology to analyze and synthesize findings from a variety of academic sources that investigate the intersection of AI, digital authentication, and RegTech. The results highlight several key themes: enhanced security through AI-powered biometric and behavioral authentication systems, the automation of regulatory compliance processes such as Know Your Customer (KYC) and Anti-Money Laundering (AML), cost reduction and scalability of cloud-based AI solutions, and the ethical and privacy challenges associated with AI’s reliance on personal data. The findings also emphasize the importance of adaptive authentication mechanisms, which adjust security measures based on contextual factors. Despite the numerous benefits, the article underscores challenges such as algorithmic bias, adversarial attacks, and the need for transparency in AI decision-making. The paper concludes by recommending a hybrid human-AI oversight approach and the prioritization of explainability and regulatory alignment in future research to optimize the use of AI in digital authentication systems.

Keywords:

Artificial Intelligence , AI , Digital Authentication , RegTech