Not directly. AI systems, being non-human and non-legal entities, cannot be held liable in the traditional sense. However, liability typically falls on the human actors behind the system, such as developers, financial institutions, or users, depending on the nature of the error and the contractual or regulatory framework in place.

The challenge lies in the opacity of AI decision-making (the “black box” problem), which complicates tracing accountability. For example, if an algorithm causes a flash crash or misguides investment decisions, determining whether the fault lies in the design, deployment, or oversight becomes legally complex.

As AI becomes more autonomous, existing legal frameworks based on human negligence struggle to adapt. Some jurisdictions are exploring new models, including

• Strict liability for high-risk AI systems
• Mandatory audits and transparency requirements
• Insurance mechanisms to cover AI-related financial risks

Ultimately, the financial sector must balance innovation with robust governance, ensuring that AI enhances decision-making without eroding accountability or consumer protection.

Give me opinion on my current paper:

Article Comparative analysis on AI-driven human digital twin for per...

AI itself cannot be held legally liable for financial errors because it is not recognized as a legal person. Instead, responsibility typically falls on the humans or organizations involved in designing, providing, or deploying the system. For instance, developers may be liable if the AI was poorly designed, vendors if they misrepresented its capabilities, and companies if they relied on the system without proper oversight. Current liability is usually framed under contract law, negligence, or product liability, depending on the context. However, financial AI errors raise challenges such as difficulty in attributing responsibility, the black-box nature of algorithms, and gaps in existing regulation.

Ghulam Muhayyu Din Exactly.

Jyoti Ranjan Nayak Absolutely. I agree with your perspective.