“Recent regulatory standards mean that enterprise level model risk management requires a combination of quantitative and qualitative methodologies, processes, and systems applied across many risk types, “ said Peyman Mestchian, Managing Partner at Chartis. “The range of SAS technology solutions covering advanced model risk analytics, risk data aggregation, model governance, workflow and reporting applied across credit risk, market risk, operational risk and financial crimes positions it as a category leader for model risk management.”
According to Chartis, firms need an agile model risk management system in order to react swiftly to regulatory and business dictated changes and quickly build and validate new models. SAS’ proven data management, model risk assessment, and centralized model inventory provide complete document and workflow management, regardless of model type or development technology. SAS customers can assess and formalize whether a candidate meets the qualifying model criteria while partitioning model validation responsibilities at any level – model family, line of business, model use, etc. Model-specific workflows facilitate appropriate level and extent of collaboration among the various stakeholders. Thus more critical models benefit from more elaborate care.
Regulators are pressuring firms to operate with management oversight and transparency that encompass the full model development, usage and validation lifecycles, supplemented with appropriate governance, policies and controls. The SAS model governance process matches the Federal Reserve’s independent model validation guidelines known as SR 11-7. SAS® software facilitates effective challenges and fact-based conversation among all model-related stakeholders, and assists in the defense of model quality to regulators. A comprehensive and flexible workflow management system assists the model inventory and model validation processes.
Chartis encourages senior management to view enterprisewide model risk management as a strategic tool. With performance tracking and model monitoring dashboards from SAS, senior management and the board can get a firm grasp of model risk and the measures to mitigate.
“Management must feel confident about models supporting business critical risk-based decisions,” said David Rogers, Risk Management Product Marketing Manager at SAS. “The SAS solution for model risk management helps stakeholders have fact-based conversations and demonstrate model quality effectively to regulators.”
SAS was recently named a category leader in both the Chartis RiskTech100® 2014 report and Chartis Operational Risk Management Systems for Financial Services 2014 RiskTech Quadrant.
Read the Chartis Model Risk Management Solutions 2014 RiskTech Quadrant® report and learn more about SAS for model risk management.