Novobanco and Yields: Transforming Model Risk Management for the AI Era

In the rapidly evolving landscape of financial services, maintaining a clear overview of statistical and AI models is a significant challenge. Novobanco, a leading financial institution, sought a partner to centralize their model documentation and streamline their risk management processes. By collaborating with Yields, Novobanco has not only optimized their internal workflows but also strengthened their readiness for upcoming regulatory shifts like the EU AI Act.

The challenge: centralizing a complex lifecycle

Before partnering with Yields, Novobanco faced the significant task of centralizing the documentation and registration of the entity’s models throughout their entire lifecycle. As a major institution, they required a robust workflow to control and monitor models effectively.

During a thorough market prospecting phase to find a tool for model lifecycle and inventory management, Novobanco analyzed several candidates. The bank needed to move away from fragmented processes toward a unified and global view of model quality. Yields stood out during this evaluation because of its unique flexibility and the freedom it offered to adjust the tool to the bank’s specific internal needs. This adaptability was a key factor in the decision to move forward with Yields.

A critical driver for this partnership was staying ahead of the regulatory curve. Yields has been instrumental in helping Novobanco address the requirements of the EU AI Act, ensuring their models remain compliant within an evolving legal landscape.

The onboarding process was simple and tailored to the bank’s specific needs, characterized by constant availability and assistance during the setup phase. Vera Santos emphasizes that the most valuable aspects of the partnership are the flexibility and the collaborative approach to meeting customer requirements.

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Measurable Results and Cultural Impact

The implementation of Yields has delivered concrete efficiencies and a fundamental shift in how the organization perceives risk:

• Increased Autonomy: Model owners now have the autonomy to register their own models, which saves significant time for the Model Risk Management team.
  
• Operational Efficiency: The team has seen increased efficiency in consulting technical documentation and communicating with different stakeholders.
  
• Risk Reduction: The platform provides a global view of the quality of deployed models and allows for the continuous analysis of model risk indicators.
  
• Organizational Adoption: The solution has been received very well within the broader organization, representing a structural improvement in the entity’s risk management.
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Looking Ahead: The Future of Integration

While the current implementation has been a success, Novobanco and Yields are looking toward further optimization. The roadmap includes enhancing the integration of Yields with other support platforms, such as development and monitoring platforms. By connecting the tool more deeply into the broader ecosystem, the bank aims to create an even more seamless environment for model lifecycle management. This ongoing evolution ensures that Novobanco remains at the forefront of AI governance and risk efficiency.

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