Financial Sector

Model Risk

In a policy environment that is broadly supportive of model use, how can firms build supervisory confidence in their models amid increasing regulatory scrutiny?

Challenges

How do you promote trust in the use of models to inform business decision-making?

Models serve many important strategic purposes for financial services firms, and in many jurisdictions are relied upon in the regulatory framework.

However, they can pose a number of risks for both financial services firms and the regulators monitoring them.

Regulators expect strong model risk management, which firms need to demonstrate sustainable viability. Therefore, strong end-to-end model risk management is a pre-requisite to achieve broader strategic goals.

Our offerings

We can help you across the modelling lifecycle with the following aspects:

  1. Governance and risk framework

    Governance and risk framework review and set-up

    Reviewing and setting up effective governance and risk frameworks used to manage risk across the model lifecycle.

  2. End-to-end MRM

    Conceptual design, system, data, processes & policies

    Designing and implementing end-to-end model risk management capabilities, from systems to data to processes to policies.

  3. Technology implementation

    Use of advanced analytics and artificial intelligence to enhance MRM framework

    Upgrading approaches to adapt existing frameworks for new and advanced analytics such as artificial intelligence.

  4. Model validation

    Confirm alignment of the model and its results with business and regulatory expectations

    Conducting effective and efficient independent model validations, with a focus on prioritizing material issues which can be communicated to your Board.

  5. Managed services

    Outsourcing development and validation

    Delivering model development and/or validation as a managed service using our global network of specialist modellers to deliver capacity cost effectively.

  1. Governance and risk framework
  2. End-to-end MRM
  3. Technology implementation
  4. Model validation
  5. Managed services

Governance and risk framework review and set-up

Reviewing and setting up effective governance and risk frameworks used to manage risk across the model lifecycle.

Conceptual design, system, data, processes & policies

Designing and implementing end-to-end model risk management capabilities, from systems to data to processes to policies.

Use of advanced analytics and artificial intelligence to enhance MRM framework

Upgrading approaches to adapt existing frameworks for new and advanced analytics such as artificial intelligence.

Confirm alignment of the model and its results with business and regulatory expectations

Conducting effective and efficient independent model validations, with a focus on prioritizing material issues which can be communicated to your Board.

Outsourcing development and validation

Delivering model development and/or validation as a managed service using our global network of specialist modellers to deliver capacity cost effectively.

Why Deloitte?

Global market leader

Deloitte has more than 300.000 employees working from across the globe. We are recognized as a global market leader within various risk areas – e.g. within cyber risk.

Dedicated specialists

We have a deep functional expertise within the various risk areas and the relevant sectors. We have considerable insight into the solutions successfully implemented at comparable companies and can therefore quickly identify the right solutions for you.

We work globally

As a starting point, we at Deloitte work in an integrated manner across borders. We mobilize employees all over the world depending on the required skills and the geography that needs to be uncovered.

Digital front runner

Our employees are leaders in the latest technology solutions. We use the latest technological opportunities in our solution design and are experienced in implementing technologies.

Reach out

Thomas Clifford

Partner

Viki Styrbæk

Manager