The Prudential Regulation Authority’s (PRA) supervisory statement SS1/13 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 …
The Democratization of Models and its Challenges for Model Risk Management
Throughout history, many human inventions have been democratized as technology has advanced, from the wheel to the printing press, to the smartphone. More recently, advances in the areas of computing power, programming capabilities, and data/information availability have resulted in a proliferation in the development and …
Understanding Uncertainty for Model Risk Management (Part 1)
Uncertainty plays a critical role in AI model risk management since it can affect their performance, reliability, and ability to make accurate predictions. Practitioners involved with these models, depending on their role within organizations, may not have a complete understanding of the concepts behind model …
Model Risk Management: Evolution, Landscape, and What’s at Stake
Models deploy into more and more areas of business operations in Finance, Healthcare, Retail, and many other industries bringing benefits to these institutions but also exposing them to greater operational, reputational, and regulatory risks. This is especially true in the Financial Services and Insurance industries, …