Hallucination
WHAT IT MEANS
When the AI confidently says something that’s wrong or made up.
Real example
The AI tells a customer their late fee is waived when it isn’t.
What’s normal
It can’t be reduced to zero, but good setups make it rare with guardrails, RAG and testing.
The India angle
In BFSI, a wrong promise about money can become a regulatory or legal problem.
Questions to ask your vendor
How do you measure and reduce hallucinations?
What happens if the AI makes a wrong promise?
Can we see examples from your testing?
Related terms
Companies that do this
Other terms in Thinking (LLM)
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