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Corporate Risk Management

Model Risk Management Guidance Designed for Your Financial Institution

BKD’s model risk management (MRM) advisory services professionals work with banks and other financial institutions to help confirm their MRM program is designed to satisfy all regulatory requirements and ensure the institution properly manages all areas of model risk. Our professionals have extensive industry experience in MRM program development and oversight, accompanied with expertise in data analytics, statistical analysis, and data mining used to develop artificial intelligence and machine learning technology. Our services include MRM program assessments, model validations, model tuning and calibration, and MRM internal controls assessments.

MRM Program Assessments

Our approach to assessing a client’s MRM program is aligned with the regulatory standards on MRM, primarily:

  • Federal Reserve System’s SR Letter 11-7, Supervisory Guidance on Model Risk Management
  • OCC Bulletin 2011-12, Supervisory Guidance on Model Risk Management
  • FDIC Financial Institution Letter FIL-22-2017, Adoption of Supervisory Guidance on Model Risk Management

Our MRM program assessment can assist you in the following areas:

  • Model Governance
  • Model Inventory, Risk Assessment, & Determination
  • Model Validation Policy & Procedures
  • MRM Reporting Structure

 

Model Validations

Our model validation services provide “effective challenge” to determine if a model is performing as expected and is in line with the design objectives and business uses.

Our model validation consists of three elements:

  • Evaluation of conceptual soundness
  • Ongoing monitoring
  • Outcomes analysis (as applicable)

Our model validation services include vendor models and other third-party products if deemed within the MRM program scope for validation. Examples include, among others:

  • Global Vision Patriot Officer (BSA)
  • Verafin (BSA)
  • Abrigo BAM+ (BSA)
  • Abrigo/Sageworks (CECL)

 

Model Tuning & Calibration

Periodically, models should be reviewed to assess that they’re continuing to function as designed with results that are consistent with current economic and environmental conditions. Our team of model validation professionals performs model tuning and calibration using quantitative analysis and well-defined change control procedures.

MRM Internal Controls Assessments

Our MRM advisory services team can help your internal audit department and/or SOX compliance group by providing the following internal controls activities:

  • Execution of internal controls testing around the MRM program
  • Help identifying control gaps and weaknesses
  • Recommendations for improvement

 

How can we help you?

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We have 40 offices in 18 states, with BKD Trusted Advisors™ who offer solutions for clients across the country.

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