Question8 The "Regulating Artificial Intelligence in Finance: Putting the Human in the Loop" article suggests that AI-adjusted personal responsibility frameworks are vital. What is the intended effect of these frameworks on senior managers (or key function holders) within financial institutions? To encourage due diligence in investigating new technologies, requiring fairness and explainability in AI systems. To absolve them of responsibility for AI-driven decisions, shifting accountability away from human decision makers. To limit their involvement in AI deployment to purely strategic oversight, without operational details. To centralize all AI development under a single, external regulatory body. ResetMaximum marks: 1 Flag question undefinedSingle choice
A
To encourage due diligence in investigating new technologies, requiring fairness and explainability in AI systems.
B
To absolve them of responsibility for AI-driven decisions, shifting accountability away from human decision makers.
C
To limit their involvement in AI deployment to purely strategic oversight, without operational details.
D
To centralize all AI development under a single, external regulatory body.

Question

Question8 The "Regulating Artificial Intelligence in Finance: Putting the Human in the Loop" article suggests that AI-adjusted personal responsibility frameworks are vital. What is the intended effect of these frameworks on senior managers (or key function holders) within financial institutions? To encourage due diligence in investigating new technologies, requiring fairness and explainability in AI systems. To absolve them of responsibility for AI-driven decisions, shifting accountability away from human decision makers. To limit their involvement in AI deployment to purely strategic oversight, without operational details. To centralize all AI development under a single, external regulatory body. ResetMaximum marks: 1 Flag question undefinedSingle choice

A

To encourage due diligence in investigating new technologies, requiring fairness and explainability in AI systems.

B

To absolve them of responsibility for AI-driven decisions, shifting accountability away from human decision makers.

C

To limit their involvement in AI deployment to purely strategic oversight, without operational details.

D

To centralize all AI development under a single, external regulatory body.

BlackTom AI · Accepted Answer

AI governance in finance emphasizes human accountability: senior managers and key function holders must exercise active oversight, perform due diligence, and ensure AI systems meet standards of fairness and explainability.

1) Relevant knowledge points and concepts
- Personal responsibility frameworks: regulatory rules that assign duties and liabilities to named individuals in an organisation.
- Due diligence: systematic investigation of technologies, risks, and controls before and during deployment.
- Fairness and explainability: requirements that AI must avoid biased outcomes and provide understandable rationales for decisions.
- Human-in-the-loop principle: keeping humans accountable for automated decision-making.

2) Step-by-step reasoning
Step 1: Regulators want to reduce harm from opaque, biased or uncontrolled AI in finance.
Step 2: Assigning personal responsibility to senior managers creates clear incentives to manage risks (they can be held accountable).
Step 3: To meet those accountability duties, managers must conduct due diligence on new technologies, demand fairness tests, require explainable outputs, and maintain oversight mechanisms.
Step 4: This results in more prudent adoption and monitoring of AI systems across the institution.

3) Intermediate steps / logical progression
- Identify risk → Assign responsibility to named persons → Require investigations, documentation, and controls → Enforce consequences for failures → Improve system safety and fairness.

4) Why the correct answer is correct
The chosen option explicitly states that the frameworks are intended to encourage due diligence and require fairness and explainability. That aligns directly with the human-in-the-loop regulatory goal of ensuring those who steer firms take proactive steps to prevent harm from AI.

5) Why other options are incorrect
- Absolve responsibility: opposite of frameworks’ purpose; they increase, not remove, accountability.
- Limit to strategic oversight: frameworks typically require operational diligence, not just high-level strategy.
- Centralize under external body: frameworks assign internal named responsibilities rather than shifting development control externally.

6) Conclusion
Therefore, the correct answer is: To encourage due diligence in investigating new technologies, requiring fairness and explainability in AI systems—matching the provided answer.