Model Risk Management

Boards and management rely heavily on model output to make strategic and/or operational decisions and it is important to have a proper program in place to ensure accuracy and reliability. Installing a well-developed Model Risk Management program will enable your institution to organize and capture the risks associated with running models and also provide an “effective challenge” environment as prescribed by regulators.

  • MRM & Governance Development

    • Development of fully-integrated model risk management and governance framework
    • Building a solid risk management structure to oversee all models and their associated risk is essential to mitigate model risk.
    • Deploying effective governance, policies and controls to enhance the program.

  • Model Inventory & Risk Grading

    • Completing a current list of all models and their associated risk rating must be available and accessible to ensure appropriate risk management.
    • Establishing a comprehensive process to identify and log new models as they are designed and deployed across the enterprise.
    • Designing an effective and intuitive model risk rating system to ensure the most critical and/or complex models receive the appropriate level of attention.

  • Risk Assessment Process & Utilization

    • Developing a risk assessment process to fully capture the extent of all the associated risks a given model may encompass.
    • Integrating risk assessments into the risk rating and validation frequency schedule.

  • Resource Requirements & Deployment

    • Assessing the requisite unique skills and resources needed to run a Model Risk Management program that fulfills the specific needs of your institution.
    • Providing independent subject matter experts for co-sourced and outsourced model validations.
    • Offering independent human resources at any stage of an MRM program, whether in development or in a mature state of existence.