Model Risk Management
Model risk management involves the identification, validation, monitoring, and control of risks associated with the use of mathematical and quantitative models on data across a varied spectrum that includes data in financial institutions, insurance, healthcare, and more. Coforge has leveraged model risk management techniques to create statistical models manage data for its Large Financial Partners (e.g. FTB) and other partners.
Our model risk management techniques include:
- Model categorization: At Coforge, models are categorized according to their criticality and complexity, which helps identifying critical and complex models, that may require more attention and resources.
- Model validation: At Coforge, we use model validation algorithms to ensure accuracy, reliability, and effectiveness.
- Model governance: Coforge has effective Governance frameworks in place which oversees managing roles and responsibilities of stakeholders at all levels, model development and maintenance, and model change management.
- Model performance monitoring: Coforge uses varied range of metrics to monitor and improve the accuracy and effectiveness of models with time.
- Model documentation: Coforge has clear documentation guidelines that document the design, development, validation, and use of models, which provides clarity on model's purpose, assumptions, inputs, and outputs.
- Model risk reporting: Coforge periodically publishes reports on model risks and identifies factors for mitigation to stakeholders, including senior management, board of directors, and regulators. Coforge reports highlight all the above-mentioned factors to minimize risks within the reports.