Which of the following is the MOST effective approach to mitigate privacy concerns when an organization collects personal data through a third-party AI application?

A nondisclosure agreement with the vendor protects organizational information but does not address the rights of individual data subjects or establish a lawful basis for processing their personal data.

Obtaining data subject consent on the end user interface directly fulfills the legal basis for personal data collection required by regulations such as GDPR, which mandates that individuals freely, specifically, and informedly agree to how their data is used. Collecting consent at the exact point of interaction ensures transparency and creates an auditable record of lawful basis. This addresses the privacy concern at its source - the moment of collection - rather than through downstream controls.

Encryption protects data confidentiality in transit and at rest but does not address the legal or ethical requirement to obtain consent before collecting personal data.

Reviewing data protection regulations is a governance activity that informs policy design but does not itself mitigate the privacy risk to data subjects.