Building Trust in Digital Finance: Why AI-Driven Compliance Will Define the Future of Cross-Border Investing
DOI:
https://doi.org/10.65150/EP-jefrr/V1E6/2025-01Keywords:
Digital Finance, AI-Driven Compliance, Digital Trust, Cross-Border Investing, Regulation TechnologyAbstract
Despite rapid advances in digitalisation, cross-border investing remains constrained by persistent concerns over security, transparency, and institutional trust. Cyber-fraud, identity theft, opaque platform governance, and fragmented regulatory regimes continue to undermine confidence in digital financial ecosystems, creating substantial information asymmetries that deter international investment participation. Addressing these structural vulnerabilities requires compliance architectures capable of providing real-time, multi-jurisdictional oversight, capabilities that traditional rule-based systems cannot deliver. This study examines how artificial intelligence (AI)-driven compliance can serve as a foundational mechanism for strengthening trust and enabling secure cross-border investment. Drawing on a systematic synthesis of scholarly research, regulatory reports, and industry evidence published between 2018 and 2025, the study analyses four thematic domains: AI-driven compliance mechanisms, digital trust and transparency, investor confidence formation, and cross-border investment participation. The findings demonstrate that AI-enabled automation, anomaly detection, behavioural profiling, and identity verification significantly enhance compliance accuracy and reduce regulatory violations. Moreover, explainable AI, audit trails, and blockchain-supported verification improve institutional transparency and reinforce user trust, which in turn increase investor confidence and platform adoption. Integrating Information Asymmetry Theory, Institutional Trust Theory, and the Technology Acceptance Model, the study develops a unified framework showing how AI reduces uncertainty, strengthens institutional credibility, and supports technology acceptance in digital finance. The paper concludes that AI-driven compliance is not merely a technological enhancement but a structural enabler of secure, transparent, and scalable cross-border investing. It offers conceptual, theoretical, and practical insights that can guide policymakers, regulators, and financial institutions in designing next-generation digital finance infrastructures.
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Copyright (c) 2025 Anthony Ogechukwu Okolo, Stephen Alaba John, Ph.D., Kwabena Adu Agyemang (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
