SS1/23 Model Risk Management Principles for All Banks
The Prudential Regulation Authority’s (PRA) supervisory statement SS1/23 Model Risk Principles for All Banks, signifies a major shift in model risk management (MRM) for banks, and emphasizes the need for clear accountability, rigorous governance, and continuous monitoring and validation of models. The role of technological solutions in this transformation cannot be overstated. From version synchronization across models, documentation and MRM policies, to implementing auditable model inventory databases, technology is a vital ally in achieving efficient and accurate MRM practices. As banks navigate their way towards SS1/23 compliance, a strategic combination of early adoption, a clear understanding of the principles, and effective use of technology can make this journey less daunting and more rewarding.
ValidMind’s novel Model Risk Management solution helps clients by providing a comprehensive and efficient approach to managing the risks associated with using models in decision-making. The platform automates key aspects of the MRM process, including model documentation, validation, and testing. Also, the built-in communication and tracking features enable all stakeholders to collaborate and communicate effectively throughout the model risk management process, ensuring that everyone is informed and up-to-date.
In short, ValidMind’s Model Risk Management solution helps financial and insurance organizations to manage their model risk effectively, ensure compliance with regulatory requirements, and reduce the potential for financial losses or regulatory violations.