CASE STUDY

Automating Model Validation at 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 on model validation.

LARGE MODEL VALIDATION PORTFOLIO

The increasing demand for model validation and fast-evolving regulatory requirements push the need for technology that enables automation and consistency of model validation efforts.

MODEL DOCUMENTATION


The variety and complexity of models is growing, while there is no dedicated technology to assist collaborative working and report generation.

MODEL LIFECYCLE


Diverse data storage and development practices requires a modular and flexible tech stack that be can be seamlessly integrated with the existing core enterprise applications.

The Challenges

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 standardise model validation activities, while improving data and information sourcing.

automated model validation

The Solution

The G-SIB chose an integrated on-premise implementation of Chiron App to support improvements in the standard of model validations.

COLLABORATION

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 user and changes.

MANAGED ENVIRONMENT

All environments are fully managed in the Chiron App platform, removing the need to manage individual Python environments, including current libraries.

AUTOMATION

Through improving the efficiency, reliability and speed of repeatable tasks and tests, the validation team reported significant increases in productivity around model validation.

The Chiron Advantage

The Chiron MRM technology is an end-to-end model risk management platform consisting of two technologies, Chiron App & Chiron Enterprise.

Chiron Enterprise is a highly configurable model inventory and workflow engine that enables organisations to access, review and update model-related info in a controlled environment. The tool ensures the auditability and transparency of all events over the model lifecycle, and facilitates a smooth execution of end-to-end model MRM processes.

Chiron App is a modular data science platform to automate all quantitative testing and documentation. The platform includes MRM-specific analytics such as benchmarking, backtesting, and data quality analysis. Chiron App versions and links all models, data, and reports, enabling users to go back in time and reproduce any previous result. 

Ready to transform your business? Let’s talk. Contact our sales team at yields.io/contact

Learn more about the Chiron MRM Platform at www.yields.io

Simon Vanooteghem
Director of Sales

Efrem Bonfiglioli
Solution Engineer

In 2022, the Chiron Model Risk Management Platform 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 recognized as a technology leader in MRM, and is supported by global partners such as KPMG and IBM.