Model Risk Management
Custom, holistic model risk management services – meeting institutions’ needs now, for tomorrow
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Custom, holistic model risk management services – meeting institutions’ needs now, for tomorrow
Financial institutions have long used models in their everyday activities to measure and manage risk – asset-liability management (ALM), Bank Secrecy Act/Anti-money laundering (BSA/AML), budgeting, capital adequacy, current expected credit losses (CECL), liquidity and more. As the list and complexity of models, data assumptions and regulatory requirements continue to grow, so does the need for a flexible model risk management strategy that centralizes your data for consistent enterprise-wide reporting you can trust.
Data is one of a financial institution’s most valuable resources. Baker Tilly’s experienced team of professionals helps clients at every stage of model risk management and regulatory compliance. From framework development and model governance to model validation and model tuning, we prepare your data to be transformed into valuable insights that guide your most important business decisions.
Baker Tilly helps clients achieve the benefits made possible with an integrated model risk management solution, including centralized reporting, enabling organization leaders to determine impacts of changing assumptions across all models at once, streamlining processes and resources, and — one of our personal favorites — eliminating single-use spreadsheets.
We start the model risk management process by understanding our client’s data sources and aggregation processes across all current models and how the data is being used across all platforms. This initial exercise allows us to help you utilize your institution's data
Baker Tilly’s model risk management solutions are customizable and scalable to fit your institution’s changing needs and evolving regulatory requirements. Our framework development solution includes:
Our data scientists and model risk specialists work with your internal departments, executive leadership and board of directors to help ensure your model risk management solution is set up correctly, documented adequately and equipped to be maintained. We help clients with:
Having a forecast component is necessary for many complex models. We help ensure your forecasts are supportable and reasonable for your operations and footprint through:
Baker Tilly can independently replicate your model from start to finish. Full replication provides you confidence that the model is estimating cash flows accurately and reasonably. Whether you need a complete model replication or help addressing specific programs or issues, our range of model validation solutions include:
With frequent changes in business activities and operations, and market conditions, it’s essential to adjust your modeling accordingly for it to continue working for you effectively. Our ongoing model testing and monitoring solution includes:
According to the Federal Reserve and Office of the Comptroller of the Currency joint Supervisory Guidance on Model Risk Management (SR 11-7), “Rigorous model validation plays a critical role in model risk management; however, sound development, implementation, and use of models are also vital elements.”
Explore the rise of bank model validation and its importance, driven by tech advancements, regulatory needs and resource optimization.
Listen to this webinar for an engaging discussion on the navigation of CECL implementation, how to view model risk management holistically and best practices for your current processes.
This article discusses CECL compliance and how to implement a model risk management solution.
This Baker Tilly article discusses how data consistency across models allows executives to go beyond box-checking compliance exercise and make better business decisions.
