Strengthening model validation through consistency and expertise

Client background 

A nationally recognized bank that operates across a broad regional footprint, offering commercial, mortgage and consumer banking services. The institution had over a dozen key models in use, ranging from CECL to mortgage compliance and underwriting.  

Historically, the bank relied on a rotation of third-party vendors for model validations. Yet, while this approach met regulatory requirements, it lacked consistency and strategic depth. Additionally, there was no single point of accountability for model risk, and no centralized provider to help connect compliance, risk and governance efforts across the institution. 

The business challenge 

Relying on multiple validation vendors created a range of issues for the bank. Report quality was inconsistent, with formats ranging from brief executive summaries to lengthy, overly technical documents filled with boilerplate content. Many findings offered limited insight – often surface-level or vague observations – with little practical guidance on next steps or interpretation. With different vendors handling mortgage, financial crimes, CECL and interest rate risk (and more) validations independently, coordination was inefficient and institutional knowledge was fragmented. 

Additionally, the lack of centralized oversight meant validations occurred in silos, hindering visibility into data dependencies and cross-model impacts. The bank recognized that this fragmented approach was not sustainable and sought a more unified, insightful model validation process – one that would not only satisfy compliance requirements but also deepen internal understanding and strengthen long-term risk governance. 

Strategy and solution 

The relationship began with a CECL validation a couple of years ago. At that time, Baker Tilly quickly distinguished itself through the depth and quality of its validation approach.  

Instead of sampling just a portion of the loan portfolio modeling, the team evaluated the entire dataset to identify even immaterial risks, ensuring a thorough assessment across the entire model. Their reporting was clear, concise and actionable – offering findings with meaningful context, straightforward explanations and tailored recommendations that aligned with the bank’s internal practices. Beyond the core validation, Baker Tilly also provided consultative insights, helping to enhance the client’s CECL methodology, documentation and qualitative factor framework and positioning the bank for more sustainable model performance going forward. 

Following this initial project, the bank expanded the engagement to include CECL consulting, validations of additional models, and ultimately, model risk governance support. Baker Tilly helped establish a defensible Q factor framework, introduced a prepayment assumption methodology using internal data, and helped developed ongoing back-testing and stress testing programs. 

As the relationship grew, the bank transitioned fully to Baker Tilly’s Compliance+ platform – consolidating model validations, risk advisory and regulatory compliance support under one roof. Instead of juggling multiple vendors for mortgage compliance, financial crimes, CECL and other model areas, the bank now works with a single, coordinated Risk Advisory team. 

A dedicated Baker Tilly model validation team leads the engagement, providing continuity, deep institutional knowledge and a more proactive approach to emerging risks. This structure allows the bank to receive richer insights, faster turnaround times, consistent reporting and a seamless validation experience across models. 

Today, the relationship goes beyond just checking the compliance box – it’s a scalable, strategic resource that supports the bank’s evolving risk management goals. By aligning with a single trusted partner through Compliance+, the bank has significantly reduced operational friction while elevating the sophistication and usability of its model risk program.