Explore Crisil, a company of S&P Global

Formerly known as Global Research & Risk Solutions

Model Risk Management

 

 

Ensuring compliance, driving efficiency and enhancing effectiveness

Since the Global Financial Crisis, MRM has become the cornerstone of strategic resilience and regulatory compliance at financial institutions globally.

As a trusted leader in the MRM landscape, we address the unique challenges financial institutions face at every stage of the MRM lifecycle.

Our comprehensive suite of offerings includes model development, monitoring and documentation, independent model validation, rigorous model testing, governance framework development, and advanced automated solutions.

Our seasoned consultants, with extensive experience across global organisations, empower financial institutions to mitigate model risks and enhance their MRM frameworks.

Our deep regulatory insights across jurisdictions make us the partner of choice for financial institutions seeking robust, compliant and future-ready MRM frameworks.

 

 

 

 

Why choose us

 

 

 

Extensive experience
across diverse
models

With over a decade of experience, we have worked with a range of models, including risk, stress testing, pricing and valuation. This diverse expertise allows us to tailor solutions to meet the specific needs of different models, ensuring compliance, accuracy and alignment with regulatory expectations.

Comprehensive and
holistic MRM
approach

Our end-to-end MRM services encompass model development, testing, validation, documentation, governance and monitoring. We provide clients with integrated solutions for the full MRM lifecycle, mitigating risk at every stage while ensuring regulatory compliance.

Deep regulatory
and policy
expertise

Our strong command over global MRM regulations (SR 11-7, OSFI E-23, CRR/CRD IV, PRA’s SS3/18, ECB’s TRIM) makes us a trusted partner for clients navigating complex regulatory landscapes. We help clients meet stringent regulatory requirements efficiently, ensuring strong governance and model integrity.

 

 

 

3K+

Successfully completed 3,000+ model-level engagements over 2023-24

15K+

Reviewed and supported 15,000+ risk and capital models (both corporate and retail portfolios) since 2015

1K+

Addressed 1,000+ regulatory MRAs, MRIAs and consent orders since 2015

 

 

 

 

Our solution components

 

 

Model development and monitoring

  • Employ the most effective and robust methodologies for model development, aligning with both regulatory expectations and business objectives.
  • Test the model rigorously to assess performance and ensure reliability across conditions, mitigating potential risks.
  • Track a model's performance continuously to identify and address issues, ensuring alignment of models with business strategies and regulatory standards.
  • Centralise and track models in use through a comprehensive inventory, providing transparency and enabling effective governance and timely audits.

Model validation

  • Validate models to ensure they meet all regulatory, risk and performance standards, thus safeguarding compliance and operational integrity - this ensures assessment of models for conceptual soundness, intended usage, risk tiering, outcome analysis and robust monitoring processes.
  • Validate modifications or partial updates to models, to ensure all changes align with regulatory expectations and minimise associated risks.
  • Validate models regularly to ensure continued effectiveness and compliance with evolving market conditions and regulatory requirements.
  • Benchmark models against industry standards and competitor models to objectively assess their performance, ensuring adherence to best practices.
  • Deploy a validation framework for vendor models to ensure comprehensive risk management for external models.

Model documentation

  • Ensure clear and thorough documentation of model development and validation for regulatory compliance and maintaining model integrity.
  • Assess and improve existing documentation to ensure it meets current regulatory standards, enhancing clarity and accuracy.
  • Establish and implement a model risk rating and approval process to evaluate potential risks and ensure compliance with organisational and regulatory criteria.

Model governance

  • Create a comprehensive policy and framework that defines governance, oversight and accountability clearly for MRM activities.
  • Establish a model risk appetite framework that aligns with organisational risk tolerance, to ensure models stay within acceptable risk limits.
  • Develop a structured ongoing monitoring plan to ensure models are regularly reviewed and remain aligned with business goals and regulatory requirements.
  • Review control processes to ensure adequate checks and balances to manage model risk effectively; evaluate and enhance the robustness of model control processes to ensure they are resilient, scalable, and capable of addressing emerging risks.
  • Design model risk reports to enable periodic reporting to management committees and Board risk committees; define KPIs and KRIs at an appropriate level of granularity for effective decision-making.

 

 

 

 

Who we serve

Corporate & investment banks and broker dealers



Commercial & consumer banks



Diversified asset managers



Hedge funds



Wealth managers and private banks



Private equity





Insurers



 

 

achieve-success

Discover why the world's most prestigious
global and regional financial institutions
chose us as their strategic partner