We advise our clients on improving their Model Risk Management and validation practices, supporting them in designing or upgrading their Model Risk Management frameworks across all lines of defence. We enable them to control and clearly communicate on their model risk exposure, and to demonstrate compliance to regulatory requirements, across jurisdictions, in the most efficient manner possible.
Model Risk Management addresses a relatively new risk that has risen through the increased use of mathematical and statistical models in financial institutions and large corporations. Model risk comes from potential issues in the design, implementation or use of a model. In particular, it occurs when decisions rely on the model outcomes without a proper understanding of their limitations. When such issues materialise, companies can face losses ranging in the millions (even billions). Model Risk Management consists of steering the exposure to that risk by implementing a robust control framework aimed at identifying, assessing and mitigating model risk, consistently across the institution.
Since 2004, Risk Dynamics has supported banks, insurers, asset managers and market infrastructure operators in setting up and improving their Model Risk Management frameworks. We have supported companies in defining and deploying Model Risk Management and validation policies and all of their related standards. In particular, we have composed model development and validation guidelines for all types of risks and models, supported institutions in designing and implementing their model inventory, defined methodologies to address model tiering, managed conservatism layers and risk appetite, supported the optimisation and automation of models development and validation processes, designed reports and dashboards for senior management and supervisors, etc.
We have refined over the years our model risk mangement framework and related toolkit, ensuring that they can be efficiently tailored to client needs.
We embrace our mission to bring each client the best service