Model Risk Manager

Overview

Financial risk models are fundamental to how financial firms drive business critical processes such as credit decisioning, fraud detection, market risk, customer targeting, pricing and capital provision. Model governance, once an ad-hoc, manual process for a subset of model types, has become increasingly more regulated within the international financial services market. Models need explicit and active management throughout their lifecycle – From proposals, implementation, periodic reviews and associated issues and risks to ensure the models deliver the expected business impacts and prevent deviancies.

Typical problems with risk model management are:

• Data Ambiguity Due to Siloed Systems: Unknown scope of model estate and lack of information about what models the organization is using, for what purposes and for what criticality resulting in a lack of oversight
• Audit Trail Ambiguity: Out of date ownership, lack of approval audit trail and evidence of review resulting in lack of accountability
• Non-Compliant Submissions: Rejected regulatory submissions due to missing data and sign-offs, resulting in deferred realization of the expected economic benefits
• Reactive Problem Solving: Periodic reviews based on criticality causes problems to be identified potentially a year or two years after the event
• Time Consuming Manual Tasks: Error prone, time consuming and costly manual status collection via spreadsheets and e-mail
• Incorrect and Unapproved Outputs: Models being released without the correct regulatory or internal approvals

Key Features & Functionality

NextWave’s Model Risk Manager provides a robust, best-in-class workflow that automates the model life-cycle governance process by effectively addressing issues, risks and controls throughout a model’s ideation, build, validation and deployment phase.

NextWave’s Model Risk Management Solution Solves This Better: NextWave has leveraged their extensive expertise in model risk oversight and paired it with the Appian low-code platform to create a unique and impactful end-to-end governance solution that solves these problems better by:

• Built by Experts: NextWave’s extensive experience in managing the risk model process helps ensure that this solution is designed to address all aspects of their business needs
• Tackles Relevant Process Needs: Tackling the realities of the risk model process for finance and risk model professionals that highlight the most pressing organizational needs
• Intuitive Design: Intuitive UI/UX which reduces need for staff training and provides real functional needs by user role
• Real-Time Analytics: Dashboard approach to give all users real time visibility, no more partial or siloed views
• Flexibility: Nimbleness and speed to deploy, adapt and integrate the risk model workflow to the solution

Benefits & Business Impact

The leadership team of NextWave have bought their combined experience and practical knowledge to ensure the solution not only provides a best-practice governance solution, but also practically solves the real business challenges suffered by those in this space.

The NextWave partners who have product-owned Model Risk Manager have held senior roles in top-tier organisations where they have both been accountable for model risk oversight and participants in the process. This unique experience has driven a business outcome focused and reality grounded solution which can be tailored to organisations needs.

The core integration capabilities of Appian enable rapid implementation of connections to internal golden sources ensuring rapid business outcome delivery. To set a benchmark of expectation, Model Risk Manager can be implemented within an organisation with a tailored workflow and internal connections in 12 weeks.

The Appian user interface provides a frictionless gateway to managing the model estate by reducing the need for training and ensuring even occasional users can get the job done with the intuitive approach quickly and effectively. This focus on ease of use and focus on the underlying activities rather than how to navigate an interface is critical to removing spreadsheet and ad-hoc model repositories.