The rising cost, complexity and regulatory burden of managing a model portfolio is increasingly prompting financial institutions to think more broadly about how they manage model risk: the risk of financial or reputational damage due to errors in model development, implementation or use.
Regulators are increasingly asking firms how they are managing model risks in ICAAP reviews, with the ECB in particular focused on model reviews as part of TRIM, and persistent regulatory scrutiny over market risk, credit risk and stress testing models.
Risk managers are tackling an ever-growing list of model remediation issues to satisfy internal model governance requirements.
Firms are increasingly trying to manage the cost and complexity of their growing model portfolios, to optimise institutional control.
Business lines are demanding ‘next-generation’ models, to compete with new entrants and achieve new business goals.
1- Model risk management advisory and consulting services, to design and implement model risk frameworks;
2- Model governance documentation services, to deliver policies, procedures, report templates, and controls;
3- Model management tooling, to design workflow, inventory management and self-assessment tools; including Advanced model risk management tools, including an inventory system and workflow management (MLAS);
4- Model risk methodology development, through scorecard design, development, and rollout; and
5- Model remediation services, to address legacy issues, manage TRIM deliverables, and optimise issue management.