In a post-COVID-19 world, proactive model risk management by all lines of defense is needed now – not only to meet new regulatory expectations, but also to strengthen institutional resiliency. It is also needed to maintain and improve model efficiency. A redefined MRM framework will include all stakeholders and cover the entire model life cycle.
Banks must to do all of this while maintaining high standards for MRM and regulatory compliance. A lot of ground must be covered in the coming months, and given the depth of the COVID-19 crisis, banks should get started right away.
This article was originally published on McKinsey.com on January 13, 2021 and is reprinted here by permission.
