Validation at a Tier 1 Bank
Independent model validation is a critical component of model risk management in today’s highly regulated and rapidly evolving financial environment. Poorly developed and designed models undermine strategic decision-making and reporting, eventually leading to financial losses and operational inefficiencies. The introduction of new supervisory guidance and regulations has significantly raised the bar for model validation and governance. However, not all financial firms are equipped to internally support robust model validation efforts.
In this case study, we look at how a London-based G-SIB implemented Chiron App to streamline its model validation process and achieve a considerable increase in productivity around model validation.
LARGE MODEL VALIDATION PORTFOLIO
Automation has become an urgent priority to improve effectiveness, efficiency and free up model validation capacity.
The variety and complexity of models is growing, while there is no dedicated technology to assist collaborative working and report generation.
Diverse data storage and development practices require a modular and flexible tech stack that be can be seamlessly integrated with the existing core enterprise applications.
The bank was looking to improve its model validation function to enable greater productivity and efficiency. This vision was needed to safely meet the increasing demand for model validation and reporting and to comply with heightened regulatory scrutiny. To materialize this vision, new technology was required to automate and standardize model validation activities, while improving data and information sourcing.
Chiron App encourages collaboration within and across functional areas by sharing specifications, best practices and developed tools & libraries.
AUDIT & COMPLIANCE
All validations and specifications are fully recorded for audit purposes, together with full details of users and changes.
All environments are fully managed in the Chiron App platform, removing the need to manage individual Python environments, including current libraries.
Through improving the efficiency, reliability and speed of repeatable tasks and tests, the validation team reported significant increases in productivity around model validation.
The Yields Advantage
Yields.io provides an end-to-end Model Risk Management platform to automate MRM activities and reduce model risk. The platform consists of two technologies: Chiron App & Chiron Enterprise.
Chiron Enterprise is a customizable model inventory and workflow management tool that streamlines the execution of end-to-end Model Risk Management processes.
Chiron App is a modular data science platform that automates all quantitative model testing and documentation.
In 2022, Yields.io has won the ‘Model Validation Service of the Year’ award at the Risk.net technology awards for the fourth year in a row. Yields.io is widely recognised as a technology leader in MRM, and is supported by global partners such as KPMG and IBM