Question 1
IntermediateEvaluate the Business Problem · Translate business objectives into Data Science/ML/AI solutions
A retail bank wants to implement a new fraud detection system using IBM watsonx.ai. The stakeholders require that the model not only predicts fraud accurately but also provides human-readable reasons for each flagged transaction to comply with regulatory explanation requirements. Which approach best satisfies these business objectives?
Answer and explanation
Correct answer: C
While deep learning might offer slightly higher accuracy, the strict regulatory requirement for human-readable reasons favors intrinsically interpretable models like Decision Trees or Logistic Regression. These models provide direct feature importance and decision paths without relying on approximations like LIME.
