The global financial crisis showed us that model risk is real and that the consequences can be far reaching. In response, regulators have increased scrutiny to ensure that financial institutions maintain effective and sustainable Model Risk Management (MRM) programs. Demonstrating not only the validity of individual models but also the efficacy of the controls covering the design, development, revision, and use of models is paramount.
Given the size and complexity of the typical model portfolio, the sophistication of both the algorithms and the underlying technologies, and the diversity of the environments in which they’re used, many organizations are struggling to meet this mandate.
KPMG’s Model Risk Management Approach offers a practical framework for identifying, quantifying, and mitigating model risk by addressing the sources of risk head on through:
- Inventory Management
- Development and Implementation
- Data Aggregation and Quality
- Risk Assessment
- Model Risk Governance, Data Management and Internal Audit
In addition to providing support for third-party MRM software or custom tools, we offer one of the few technology-based solutions in the industry designed specifically to help manage model risk.
KPMG Model Risk Management Suite is a feature rich, easy to use, browser-based tool.
The KPMG Model Risk Management Suite (MRMS) is a holistic technology solution designed to be customized quickly and easily to fit your organizational structures, dependencies, workflows, risk assessment approaches, validation policies and reporting requirements. MRMS is available as a Software-as-a-Service (SaaS) offering hosted and maintained by KPMG, or as an on-premise solution.
Few firms can offer the breadth and depth of skills, tools and experience required to develop a complete and successful MRM program – sensibilities we bring to every project, including:
- An intimate understanding of the financial services industry
- Extensive experience in model development and validation
- Deep expertise in governance and risk management practices
- Tools and templates to help automate workflows and speed program implementation
For over 100 years, organizations around the world have relied on KPMG for trusted business advice. We’ve helped financial institutions of all sizes, including commercial and retail banks, mortgage originators and insurance providers, turn the challenge of MRM into an opportunity and a business enabler.