Benchmark Survey on Model Risk Management

Model risk management (MRM) is becoming a more and more important topic on the agenda of financial institutions and specifically CROs. Within these institutions, the reliance on their (own) models is growing and the use cases for models continue to grow. We performed a benchmark study on 11 financial institutions around the world recently. The results provide insights with regards to the challenges, the expectations, and the future solutions financial institutions see for MRM. The study performed does not only provide a peer comparison between these financial institutions, but it provides relevant insight into innovative solutions as well. The study is divided into four categories: model inventory, modeling resources, model lifecycle, and innovations in standardization and automation. Before providing some of the benchmark results we start with a brief introduction to MRM and will show an illustrative model risk management framework. 

Link to the full article including results