New Solution Optimizes Full-Lifecycle Model Risk Management to Allow Businesses to Satisfy Regulatory Requirements and Increase Operational Efficiency
MathWorks today unveiled Modelscape, a set of multi-platform products that offer senior managers operating in highly-regulated industries an efficient workflow for creating, documenting, validating, deploying, and managing models and associated data. Businesses can use Modelscape to reduce risk by improving their organization’s Model Risk Management (MRM) lifecycle while maintaining regulatory compliance.
MRM was first outlined by the Federal Reserve and the Office of the Comptroller in the SR 11-7 Guidance on Model Risk Management, adopted in the European Central Bank’s Targeted Review of Internal Models (TRIM), and, more recently, the United Kingdom’s CP6/22 consultation paper. IDC’s Establishing a Comprehensive model Risk Management Application in Banking report found that larger banks are increasing the number of models in use by more than 20% per year, with the number of models in use at the average bank “likely in the hundreds and thousands for larger institutions.” But MRM’s benefits go beyond compliance. Financial institutions can reduce costs, make timely decisions to reduce time-to-market, and maintain their competitive edge using AI and machine learning models.
With Modelscape, financial institutions ensure the consistency of their modeling approaches and processes across teams, manual model documents for validation and regulatory approval, and reproducibility and traceability of results. The product also has built-in APIs to seamlessly interoperate with a wide range of Open Source and third-party technology platforms across the modeling lifecycle.
Modelscape products include:
- Modelscape Governance™: Centralized access to models, dependencies, meta-data, lineage, audit trail, risk scoring, and model risk reporting.
- Modelscape Develop™: Develop models with automated documentation and reproducible processes. Financial institutions can explore, develop, back-test, and document models and methodologies.
- Modelscape Validate™: Model validation including what-if and sensitivity analysis on model parameters. Financial institutions can also perform an independent model review, comment, and flag various aspects for response and resolution.
- Modelscape Test™: Perform automated pre-production build and test with audit tracking. Businesses can also compare trials of the preproduction model with a production model.
- Modelscape Deploy™: Host production models and scale in a secure, controlled environment “on-prem” or “cloud.” Financial institutions deploy models in the production environment without recoding.
- Modelscape Monitor™: Monitor, analyze, and report model performance through a configurable and customizable reporting dashboard.
“Model Risk Management is a complex function critical to preventing the severe consequences of model misuse and malfunction for financial institutions,” said MathWorks Director of Product Marketing David Rich. “Modelscape is an innovative multi-platform model lifecycle solution that includes governance, automation, documentation, and operation in a unified, configurable system. We’re excited to leverage our extensive experience working with top financial services firms and regulators to deliver a solution that reduces model risk while simultaneously increasing efficiency and speeding the path to production.”
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