medium · FRM Part 2 Operational Risk
A bank is evaluating the use of Machine Learning (ML) to triage transaction monitoring alerts.
Which new risk-management obligation does this 'ML Triage' model create?
- It allows the bank to shift all AML monitoring responsibilities entirely from the first line onto the IT department.
- The bank must validate the 'explainability' of suppressed alerts to prove that the model is not creating invisible false negatives.
- The ML model must be trained exclusively on external loss data sourced from competitor institutions rather than internal history.
- It removes the bank's need to file Suspicious Activity Reports (SARs), since the ML triage model now assumes that regulatory reporting duty.
Sign up free to see the explanation and track your rank →
More FRM Part 2 Operational Risk practice
- Which of the following describes the 'One Big Loss' principle for heavy-tailed (subexponen
- Under the current Basel Standardized Measurement Approach (SMA) for operational risk, whic
- Which of the following is NOT one of them?
- What is the marginal coefficient for the portion of the BI that exceeds 30 billion euros?
- According to standard regulatory definitions (such as SR 11-7), which three components are
- A material change to a model is most likely to be triggered by which event?
- How long is the historical window required for calculating the average annual operational
- In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the oper