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AI Governance and EthicshardMultiple ChoiceObjective-mapped

AI0-001 AI Governance and Ethics Practice Question

A financial institution is deploying an AI system to approve personal loans. To comply with the EU AI Act's high-risk AI requirements, the bank must ensure meaningful human oversight. Which implementation BEST satisfies this requirement?

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

Require a human to review and approve every loan decision before it becomes final

The EU AI Act requires that high-risk AI systems allow for human oversight, including the ability to override or reverse the system's decisions. A mandatory human review before final approval ensures that the human can intervene. The other options either do not provide effective oversight or allow for rubber-stamping.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • Require a human to review and approve every loan decision before it becomes final

    Why this is correct

    Human-in-the-loop with mandatory approval ensures that the human can override the AI's decision, fulfilling the oversight requirement.

  • Use a separate AI model to audit the primary AI's decisions weekly

    Why it's wrong here

    Auditing is a monitoring measure, not real-time human oversight for each decision.

  • Allow applicants to appeal AI decisions through a customer service process

    Why it's wrong here

    Appeals after the fact do not constitute 'human oversight' during the decision-making process as required by the Act.

  • Provide a dashboard showing the AI's confidence score for each application

    Why it's wrong here

    Showing confidence scores helps transparency but does not provide the ability to intervene before the decision is made.

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Written by Johnson Ajibi, MSc IT Security

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