Establishing a Comprehensive Model Risk Management Application in Banking

Establishing a Comprehensive Model Risk Management Application in Banking

  • March 2021 •
  • 5 pages •
  • Report ID: 6039627 •
  • Format: PDF
This IDC Perspective discusses the increasing use of models at financial institutions for a wider range of purposes, from traditional risk areas to new uses involving decision support throughout the enterprise. By some estimates, larger banks are increasing the number of models in use by more than 20% per year, with the number of models in use at the average bank likely in the hundreds and thousands for larger institutions. Advanced analytics using AI and machine learning offers important benefits to control model risk and improve risk management in a host of other areas throughout a financial institution.According to Steven D'Alfonso, research director, IDC Financial Insights, "AI-based model risk management applications can provide important benefits to control model risk, improve model risk governance, and improve overall financial performance."