FinTech Development and Its Role in Financial Inclusion: The Enabling Role of Artificial Intelligence in Digital Financial Services

Abstract

FinTech helps those who are excluded from official financial services. However, due to the lack of information for everyone, high transaction cost and different needs of users, there are still problems. This hinders real inclusion. This study focuses on how artificial intelligence (AI) can change digital financial services (DFS) to improve financial inclusion. It uses the ideas of information economics, transaction cost theory and long tail theory. Artificial intelligence technologies-such as machine learning for credit rating, personalized natural language processing, and predictive analysis for managing risks before they arrive-allow the transformation from standard, response and manual models to predictable, intelligent and automated personalized systems. Specific cases such as intelligent risk control, intelligent marketing (providing targeted microfinance) and improving customer experience show that access and efficiency are improving. However, algorithm deviation, data privacy risk, digital skill gap and rule lag all bring major problems. These problems may duplicate or aggravate exclusion. Looking ahead, the focus will be on ethical rules, transparency, links with existing digital tools, and good governance. According to the analysis, if we pay attention to fairness, transparency and artificial control, artificial intelligence financial technology can really help everyone get financial services more easily. This will also help to achieve the goal of sustainable development.