Model Risk Management Diagnostic Tool: Identify potential risks

Identify potential model risk management weaknesses regarding compliance and practice.

The following contents are covered:

The Business Analytics Model Risk Management Diagnostic Tool examines 13 dimensions that are significant for successfully evaluating your model risks:

MRM Framework and Policies
Definitions and Scope
Model Risk Measures
Governance
Organisation
Regulatory Assessment
Model Development and Implementation
Model Validation
Model Documentation
Model Use
Internal Audit
Model Inventory
Technological Environment

Model Risk Management Diagnostic Tool Preview

Get a first impression of the Business Analytics Model Risk Management Diagnostic Tool. This preview contains a number of questions from the full analytics.

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A number of different drivers, including the growth of models providing better coverage of possible risks and the continuing progress of digitalization, have prompted further developments in the financial industry that enhance the ability to manage and monitor model risks. Use this Business Analytics to identify potential weaknesses in your model risk management concerning compliance with regulations and practices.

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Start the Business Analytics preview. It contains an overview of all dimensions of the analysis and offers you a first insight into the question structure at hand with one of many response scales.

1/13 MRM Framework and Policies

Does your institution have a model risk management policy or framework?

Yes

No, but we are in the process of developing one

No, and we are not currently developing one

2/13 Definitions and Scope

Does your institution have a definition of model?

Yes, prescribed by the regulator 7 supervisor

Yes, developed internally and aligned where possible to regulatory / supervisory guidance

Yes, but with significant deviations to regulatory / supervisory guidance

3/13 Model risk measures

Has your institution defined a tolerance for model risk?

Yes, Quantitative metrics ans Qualitative statements

Yes, but qualitative statements only

No, but we are currently developing it

No, and we are not currently developing one

4/13 Governance

Is there a dedicated team or function with responsibility for model risk management?

We have a Model Risk Management function

Model Risk Management is managed by the validation team

Model Risk Management is managed by the development team

We have no dedicated responisbilities associated with MRM

5/13 Organisation

Does your institution outsource MRM activities?

Yes, we completely outsource activities (e.g. validation)

No, but we use external resource to augment our team on a semi-permanent basis

No, but we use external source to augment our team on an infrequent basis

No, and we do not use external resources as well

6/13 Regulatory assessment

Have you carried out any assessment (with or without 3rd party involvement) of your compliance to regulation or supervisory expectations of MRM?

Yes, within the last 1year

Yes, within the last 1-3 years

Yes, within the last 3-10 years

No, or over 10 years ago

7/13 Model Development and Implementation

Does your institution have a framework document for model development (e.g. model development standards)?

Yes

No, but we are currently developing it

No, and we are not currently developing one

8/13 Model validation

Does your institution have a framework document for model validation (e.g. model validation standards)?

Yes

No, but we are currently developing it

No, and we are not currently developing one

9/13 Model documentation

Does your institution have a register of model documentation?

Yes

No, but we are currently developing it

No, and we are not currently developing one

10/13 Model Use

Is the use of each model clearly documented (including secondary uses)?

All models have their uses documented

Only material models have their use documented

Model documentation does not include a section for model usage

We have no process or documentation to track model uses

11/13 Internal audit

Does your internal audit function review any aspect of MRM?

Yes, they review validation process

Yes, they review our adherence to the MRM framework

Yes, they review the status and ontrols around MRM actions

No involvement

12/13 Model inventory

Does your institutions have a model inventory / register?

Yes

No, but we are currently developing it

No, and we are not currently developing one

13/13 Technological environment

In which areas do you use an automated solution (excluding VBA macros)

Model inventory

Model documentation

Model validation

Model monitoring

We us eVBA macros to automate certain processes

We have no use of automation

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