Model Risk Management

alt_moon Model Risk Management

ARCSys can support your institution in developing a Model Risk Management policy by evaluating your models and personnel to determine the policy requirements necessary for your institution based on your current policies, procedures, and best practices. ARCSys may also recommend additional procedures to be considered based on the CECL standard requirements or Model Risk Management best practices.

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The best CECL analytics are built with

AVM

Our Model Risk Management process will address the following:

  • Importance of Model Risk Management
  • Grouping similar risk characteristics
  • Methodology
  • Assumptions and limitations
  • Proper documentation

  • Assess source data for reliability and completeness
  • Assess data appropriateness
  • Provide data application

  • Alignment
  • Model determination
  • Accuracy of model calculation
  • Model procedures review
  • Implementation and model change documentation
  • Model controls and access

  • Sensitivity Analysis
  • Benchmark Analysis
  • Back-Testing Analysis

ARCSys will collaborate with your institution to create a thorough Model Risk Management policy, recommending changes in procedures, as well as internal controls, to ensure that your institution is as risk-averse as possible. By effectively managing model risk, your institution can ensure that your CECL estimates are robust and reliable, allowing you to maintain financial stability and regulatory compliance.