KPMG LLP’s Model Validation Team helps financial institutions manage external and internal challenges amid a rapidly evolving business, regulatory, and economic environment. We help our client navigate through complex model governance and validation regulations, thereby assisting them in making better-informed decisions, mitigating model risks, and turning financial risks into opportunities and a competitive advantage.
We find that models used by financial institutions are often complex, mathematically sophisticated, influenced by user assumptions, developed internally, and linked to key data and supporting systems manually. Our model validation team brings deep expertise in model logic, analytics, theory, governance, reporting requirements, and key controls and we provide comprehensive assistance with all phases of model validation-related services:
- Reviewing the model policies, procedures and documentation
- Data inputs and assumptions
- Processing components
- Model output and reporting
KPMG impartially reviews an organization’s model usage relative to management’s defined objectives and compares methodologies to industry-leading practices. We offer a powerful combination of professional credentials and extensive engagement experience supported by proprietary tools and methodologies. Some of these include:
- Highly specialized practitioners. Our model validation team has vast knowledge of the financial services industry and brings deep expertise in model logic, analytics, theory, and governance and reporting requirements.
- Proprietary tools and approaches for model validation. We have developed internal proprietary tools and approaches to help our clients meet regulatory requirements and assist them evaluating the products, characteristics, and critical inputs that drive model results.
- Model validation independent of the model development process. Regulatory requirements, as well as best practices, tell us that those people who develop the models critical to an organization cannot be the ones who validate them. Our model validation services provide complete independence coupled with the requisite expertise to validate the most complex models.
- Broad industry experience. Our broad industry experience provides unique access to market intelligence and insight, along with a robust model validation approach that employs industry best practices.
For more information about KPMG’s Model Validation services, please contact one of the following KPMG professionals:
For information about KPMG’s related Financial Risk Management Services, please visit our Financial Risk Management page.