Explanation:
A primary disadvantage of using external ("off-the-shelf") AI models is reduced transparency and potential vendor lock-in. Many external AI solutions operate as "black boxes" where users do not have access to the underlying algorithms or training data specifics. Additionally, institutions risk vendor lock-in, where they become heavily dependent on a third-party provider, making it difficult or expensive to switch providers or develop internal models later.
Ultimate access to all questions.
Q.41 A key trade-off for central banks considering AI adoption involves choosing between "off-the-shelf" (external) and in-house (internal) models. What is a primary disadvantage of using external AI models?
A
Higher development costs and longer implementation times.
B
Reduced transparency and potential vendor lock-in.
C
Limited access to large datasets for model training.
D
Difficulty in attracting and retaining specialized AI talent.
No comments yet.