Model Validation & Model Risk
Independent model validation aligned to SR 11-7, TRIM, and PRA SS1/23 — from conceptual soundness and data quality through implementation testing, benchmarking, backtesting, and outcomes analysis.
Background reading on this work: LGD & EAD Validation: Common Pitfalls and Model Risk & Independent Validation.
Outcomes you can expect
- A validation opinion your regulator and board will accept
- A clear, prioritised list of model weaknesses and remediations
- A model inventory and lifecycle you can actually manage
Typical engagements
- Conceptual soundness and methodology review
- Data lineage, quality, and representativeness testing
- Implementation testing, benchmarking, and backtesting
- Model risk framework, inventory, and tiering
Insights articles that go deeper on model validation & model risk.
LGD & EAD Validation: Common Pitfalls
PDs get the attention, but LGD and EAD errors quietly move ECL and RWA more than most banks realise. This is where independent validation actually earns its fee.
Read the articleModel Risk & Independent Validation
Independent model validation is often reduced to a compliance exercise. That is a mistake — a well-run challenge function is one of the few controls that catches model failures before the market or the regulator does.
Read the articleAI Model Risk Management in 2026
AI adoption does not suspend model risk management. It raises the standard of evidence banks need before a model is allowed anywhere near a customer or a capital number.
Read the articlePRA SS1/23 in Practice
SS1/23 is five principles long and deceptively demanding. The gap between a compliant framework and a working one is almost always ownership and evidence.
Read the article