ValidMind co-founder and Chief Product Officer Mehdi Esmail knew there was a better way.

He had been working in financial services for years as a leader working for banks on the data and analytics side, and later as a consultant helping large financial institutions build and deploy machine learning models and analytical solutions.

“One of the challenges I constantly ran into,” Esmail says, “was the problems with model risk management.”

He found the practice of creating financial models straightforward and achievable. When it came to ushering them through the model risk management lifecycle, however, he faced “a tedious and time-consuming process.” Manual processes to get through to production were blocking the capabilities of the bank to innovate and push services to market faster.

“I started to be interested in ways that the process could be solved using technology and techniques from the software industry,” he says.

The kernel of an idea

He set out to turn that kernel of an idea into an opportunity. In Fall 2021, Esmail joined the AI Fund as a founder-in-residence. His aim was to see if his idea — to radically simplify the model risk management processes for the financial services industry — could become a marketable business solution.

Support from the AI Fund allowed Mehdi to build a team of co-founders, and he found like-minded partners in chief executive officer Jonas Jacobi and chief technical officer Andrés Rodriguez, who immediately saw the potential in ValidMind.

“I was at a point in my life where I wanted to be part of something impactful for people,” Rodriguez explains. “When I met Mehdi, we talked about revolutionizing the way financial services companies approach model risk management. Knowing the impact that bad decisions can have (for banks), it was a very interesting opportunity for me and a very meaningful problem to try to tackle. When I realized the potential of bringing automation to antiquated processes, that was an amazing journey to be part of.”

Jacobi also saw the opportunity immediately. He led the team through some initial research to qualify the opportunity. He recognized a niche in the ability to address the entire model risk management lifecycle with a single solution.

“When we got together, we realized this was a chance for us to build a new type of solution that would address the needs of banks and their desire to deploy models faster and get through the model risk management process faster,” he says.

Building a company on strong values

The solution began to take shape, and the company began to grow as a remote-first operation. This allowed the leadership team to hand-pick a team of global experts with the technical and design acumen required to build the best possible product, combined with MRM expertise.

“When we set out to build ValidMind, we had a strong alignment on the culture we wanted to build and the people we wanted to bring into the company,” Esmail says. “We built it around three values we hold strongly: Integrity, humility, and ownership. We’re looking for people who are going to act like owners of the company — people who are going to take initiative and empower themselves to do great work.”

A purpose-built model risk management platform

The product that grew out of the frustration that Esmail faced in his banking experience is the ValidMind model risk management platform. It’s a comprehensive, end-to-end solution that streamlines the most painful parts of the MRM process: Model documentation, model validation, and model inventory governance.

“ValidMind is the only platform today that is purpose-built for model risk management professionals in the banking industry,” Jacobi says. “That makes us more efficient than any other platform that’s available. If you look at players that have an offering, theirs is more of an additional feature set on another platform that may not be designed specifically for MRM.”

From the start, Esmail knew there was a better way, and the company now delights and inspires a growing list of global banking customers who reap its benefits. Or, as Jacobi puts it, “We’ve built the right product for the right clients with the right team at the right time.”

ValidMind in the Media

• Business Insider: Fintech ValidMind aims to ease Wall Street’s AI risk management headaches. Here’s the pitch deck it used to raise $8 million in a round led by Point72 Ventures
• VentureBeat: AI risk management startup ValidMind raises $8.1M to help banks comply with regulations
• SiliconANGLE: ValidMind raises $8.1M to streamline AI model risk management processes 
• Techopedia: What the New EU AI Act Means: Expert Analysis
• PYMNTS: EU’s New AI Rules Spark Debate Over Innovation ‘Barrier’
• The AI Journal: From regulated innovation to privacy protection: the EU’s AI Act and perspectives on what it means for