Which of the following is MOST important for an IS auditor to consider when identifying AI risk in a know your customer (KYC) application within a banking organization?

Question

Options

• AIntellectual property leakage and invalidation
• BBenchmarking against peer organizations
• CIncident response plan
• DBusiness disruption and financial impact

• A
  11% (3)
• B
  4% (1)
• C
  4% (1)
• D
  82% (23)

Explanation

A KYC application is a critical regulatory and operational function in banking. When an IS auditor identifies AI risk in this context, business disruption and financial impact (D) is the most important consideration because failures in KYC-such as incorrect identity verification or model errors-can result in regulatory penalties, inability to onboard customers, financial losses, and reputational damage. While intellectual property leakage (A) and incident response plans (C) are valid concerns, they are secondary to the direct business and financial consequences. Benchmarking against peers (B) is a useful analytical technique but not a primary risk identification factor.

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