A bank deploys an agentic AI system that autonomously negotiates and finalises small-business loan terms by calling internal pricing and approval tools. A governance analyst forecasts that, beyond the borrowers it touches directly, the system could steadily tighten credit for a whole sector if it learns to favour one risk profile, harming suppliers and employees downstream. Which action most directly reduces this forecast secondary and downstream harm before it materialises?
- AAdd a post-incident review step that examines sector-level credit effects only after a complaint about reduced lending is received from an affected industry body.
- BDisclose in the customer terms that an AI system sets the loan conditions, so borrowers understand a system rather than a person made the offer.
- CInstrument sector-level lending distribution metrics with thresholds that trigger review, so concentration shifts that disadvantage an industry are detected and corrected early. Correct
- DRestrict the agent's tool permissions so it cannot finalise terms above a set value, routing larger deals to human credit officers for sign-off.
Why A is wrong: Post-incident review is a real control, but waiting for a complaint means the downstream harm has already accrued, which fails the aim of reducing a forecast harm before it materialises.
Why B is wrong: Transparency to the borrower is a genuine obligation and tempting to choose, but informing individual applicants does nothing to detect or constrain the sector-wide credit-tightening that the analyst forecast.
Why C is correct: Forecast secondary and downstream harms are reduced by measuring the aggregate effect they would produce, so instrumenting sector-level distribution metrics with thresholds detects the credit-tightening pattern early and lets the bank intervene before it harms suppliers and employees.
Why D is wrong: Tool-permission limits are a sound agentic control and reduce single-deal exposure, but a value cap on individual deals does not address aggregate, sector-level distributional drift, which is the secondary harm in question.