Explanation:
Ensuring the ethical and responsible use of AI in financial risk management involves not just the development of AI models but also the continuous oversight of their implementation. Conducting regular audits by external, independent AI ethics boards is a key practice that allows financial
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Q.5664 In adopting AI-driven solutions for financial risk management, a key challenge is to manage potential model biases that may result in unfair or unethical outcomes. When an AI-driven credit risk assessment model is developed, which approach should a financial institution prioritize to ensure responsible implementation and adherence to ethical standards?
A
Rely solely on the historical data without considering socio-demographic factors to avoid any accusations of bias.
B
Implement regular audits by external, independent AI ethics boards within the institution.
C
Utilize the highest-performing AI models irrespective of their complexity and lack of transparency.
D
Focus purely on machine learning performance metrics such as accuracy and error rates.
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