We support our clients in validating models, internally developed or based on vendor solutions, across all uses: pricing, valuation and risk management.
Our pool of experts covers all assets and liabilities with years of experience in banking, insurance, asset management and financial market infrastructures.
Apart from financial risk models, we also validate non-financial risk models (e.g. AML, Fraud), treasury/liquidity models, and models based on new techniques (e.g. machine learning), supporting our clients in all their potential needs.
Model Validation consists of assessing the risk of whether an individual model contains issues or is improperly used vis-à-vis best practices guidelines and/or regulatory requirements. Model issues are due to flaws in design or technical implementation, while misuses are typically driven by an inadequate understanding of model assumptions or limitations. In all cases, these issues or misuses can lead to adverse business decisions with potentially severe financial damage for the company. The validation has to be performed by an independent party and provides assurance to all stakeholders (model owners, developers, board and supervisors) that these issues and limitations are well known and mitigated.
Risk Dynamics has validated hundreds of models for banks and market infrastructure operators (clearing houses & CCPs) across all models types and uses (pricing, valuation and risk management). We have supported institution validating models according to successive Basel standards, SR11-7 and other relevant regulatory regimes (e.g. EBA/ECB, PRA, APRA, OSFI).
Risk Dynamics has years of experience in validating pricing, valuation and capital models for life and P&C insurers. We have supported our clients in their applications to Solvency II, Lloyds, SST and other regulatory regimes (e.g. BMA).
Over the years, Risk Dynamics has developed a proven and flexible proprietary Model Validation framework that can be easily tailored to individual clients’ needs. This framework is supported by a wide validation toolkit, testing libraries and platforms. It enables us to capitalise on our years of benchmarks and to provide a very efficient service.
We have teams located in strategic global locations (Europe, North America, Asia), remaining in close contact with clients with an operating model that leverages our experts worldwide.
Our delivery model allows us to serve punctual client needs and can be smoothly adjusted to evolutions in demand. We also have experience in long-term partnerships and outsourcing with several clients, working closely with their internal teams for many years.
We embrace our mission to bring each client the best service
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