Regulating Algorithmic Appraisal: A Normative-Juridical Study of AI-Generated Decision Systems in Indonesia^s Digital Gold Pawn Industrybmit This Sample Abstract
Evyta Rosiyanti Ramadhani, Ayudya Rizqi Rachmawati, Roro Hera Kurnikova

Faculty of Law, University of Jember

Abstract

This study examines the critical regulatory challenges posed by algorithmic appraisal systems within Indonesia^s rapidly digitizing gold pawn industry. While the adoption of Artificial Intelligence (AI) and automated valuation models (AVMs) enhances operational efficiency, it introduces significant legal risks, including valuation errors, algorithmic bias, and accountability gaps. The primary objective is to analyze the adequacy of Indonesia^s existing legal framework and to propose a coherent regulatory model grounded in normative-juridical research. Employing a doctrinal methodology, the research utilizes statutory and conceptual approaches to analyze key regulations, including the Civil Code, financial service authority rules (POJK), and laws on electronic transactions, consumer protection, and personal data.
The analysis identifies substantial regulatory deficiencies, particularly the absence of mandatory algorithmic audit standards, unresolved liability structures, and insufficient procedural guarantees for consumer explanation and redress. In response, the study proposes a four-pillar reform agenda. This includes the formal classification of AI-based appraisal as a high-risk financial system, mandatory algorithmic audits and impact assessments, binding explainability standards, and a reconstructed liability regime centered on strict deployer responsibility. This model imposes primary accountability on pawn operators, simplifying consumer redress and aligning with international norms on AI accountability. The study concludes that implementing this integrated framework is essential to balance technological innovation with consumer protection, legal certainty, and equitable economic participation in Indonesia^s digital pawn sector.

Keywords: AI-Generated ,Digital Pawn

Topic: Technological Moderation for Collective Legal Response (Legal Innovation- Collaborative Regulation- Technology and Law)