Experian partners with ValidMind to optimise model risk management

The partnership is designed to combine the data, analytics and modelling features of the Experian Ascend Platform with ValidMind’s solution for model governance and documentation automation. The integrated solution addresses some challenges that financial institutions face, such as regulatory compliance, operational inefficiencies, and the need for scalable governance solutions.

Model risk management integration

The integration automates key aspects of model risk management, including model documentation, validation, and governance. This increases consistency and reduced the risk and time required to meet compliance requirements, such as SR 11-7, E-23, SS1/23, and the EU AI Act.

This partnership is aimed at financial institutions, insurance companies and fintech organisations that need support in meeting regulatory changes. By leveraging GenAI and implementing it into customisable templates for credit, fraud, and other models, financial institutions can ensure consistent documentation and easy regulatory submissions.

Another feature of the solution includes simple integration with the Ascend Platform, which results in optimised tracking, monitoring, and audit readiness. Users will also leverage tools for ongoing performance monitoring, independent validation testing, and bias detection that adhere to industry standards.

Early adopters of the Experian and ValidMind solutions reported significant reductions in documentation timelines and improved audit readiness.

Importance of model risk management (MRM)

The number of models being developed and used by financial institutions continues to rise. These models help companies make sense of complex relationships and large volumes of information to support decision-making.

According to PwC’s report, 56% of financial institutions do not utilise any technological solution to support their MRM function but more than two-thirds of these institutions plan to implement such a solution in the future, because of regulatory pressures from authorities.

Most risk managers (75%) tend to evaluate the MRM function in their institutions as strong and fit for the purpose. However, there is still a significant number of managers, namely 25%, that found their MRM function insufficient.