A case study highlighting effective model risk governance and comprehensive model inventory roll-out across a financial institution
Client: A major US-based financial institution
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Background
The model risk governance team of a financial firm, which was an early adopter of sound model risk management (MRM) practices, created an MRM framework.
The firm sought a solution to roll out and implement its MRM framework across the organization’s three lines of defense.
It wanted the solution to cover the important aspects of its MRM policy such as model identification, model inventory and records, attestation, validation processes, model tiering and risk scoring, and model risk governance.
Finding the right partner
To shortlist a solution provider, the firm floated a request for proposal (RFP). It found most options expensive, cumbersome to implement, or requiring heavy involvement of its IT team.
It contacted us to know how the MRM space has matured over the years. We walked the firm through a demonstration of our Model Infinity, a solution that comprehensively addresses management needs around model inventory, governance, workflows, and lifecycle practices for the MRM function.
The firm’s model risk governance team saw all needs being met through Model Infinity, almost out of the box. It invited us to be a part of the RFP, and subsequently chose us as its solution partner.
CRISIL delivered the Model Infinity solution via a build-operate-transfer mode:
Build
We configured the Model Infinity platform and set up a SaaS offering for MRM capabilities
The platform had the ability to create, modify, consult, version, and validate models
It could maintain model meta-fields in an orderly, unified manner
It was a single source to manage the entire model inventory, including models, workflows, lifecycle, risk scores, and user roles
It could maintain lineage via granular change and audit trails of every change
It allowed distributed teams to work on common workflows
Operate
The project had five milestones, and we successfully achieved all of them within three months of project initiation
The platform went live on the date agreed between the parties
We worked closely with the client's model risk governance and other stakeholder teams, to ensure all project risks were mitigated and the platform reflected the client vision
Transfer
Conducted more than five official training sessions with different user groups within the firm
Held multiple sessions with SMEs, business users, and QA teams during the knowledge transfer phase to ensure a seamless experience
Created an exhaustive user guide and process documents to help business users and internal teams
Continue to provide support to the client team during seasonal demand peaks for MRM capacity
Client impact
The firm was able to build significant MRM capability quickly across the organization, and meet its strategic objective of implementing an MRM platform at optimal cost
The client had a fully functional MRM platform within a few months of project initiation, with extensive customization based on its MRM policies
A customized modern MRM platform reduced inconsistencies and human errors from manually updating Excel files; it created a scalable work process by replicating different workflows
Continued CRISIL support for seasonal workload has led to optimal use of the client’s own MRM capacity
The client found the customized workflows and the individual dashboards for specific user groups, including for senior management, extremely useful
Questions
For any Model Infinity related queries, please contact: sales@crisil.com
