A financial services firm uses an AI model to detect fraudulent transactions. The model is deployed in the EU, where the AI Act may classify it as high-risk, and in the US, where the FTC expects fair lending practices. The firm's data science team wants to improve the model's accuracy by using more sensitive personal data. What should the compliance officer advise?

Proceed with using the data because fraud detection is a legitimate interest that overrides all privacy concerns.

Conduct a data protection impact assessment and ensure the data processing is lawful and transparent under GDPR and any applicable AI Act provisions.

Anonymize the data completely so that GDPR does not apply, and then use it without further restrictions.

Limit the model to US customers only to avoid EU data protection rules.

EC-CouncilArtificial Intelligence Essentials

Domain 5Objective 4

Global AI Regulations and Policies AIE Practice Questions (Page 9)

Part of the AI Ethics and Responsible AI domain, which makes up ~18% of our current practice bank.

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Questions 41–41

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A financial services firm uses an AI model to detect fraudulent transactions. The model is deployed in the EU, where the AI Act may classify it as high-risk, and in the US, where the FTC expects fair lending practices. The firm's data science team wants to improve the model's accuracy by using more sensitive personal data. What should the compliance officer advise?
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Global AI Regulations and Policies AIE Practice Questions (Page 9)

Questions 41–41

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