The risk manager’s role in combatting model risk through model validation

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By Ayan Mukherjee, Product Owner, Data Science Model Validation, ING

How have you seen the risk managers role evolve over the past 5 years?

The role of a Risk Manager (RM, henceforth) has evolved quite a lot over the last five years. As banks are heading towards implementation of model risk management within their organizations, the scope and responsibility of the RM has expanded many fold. As the Senior Product Owner of a model validation team, I am a RM as well and as such I not only need to make sure that the backlog and project management is under control, but also ensure that I am aware of the model risk associated with each of the models that are validated in my team. This includes understanding the limitations, assumptions and issues with the model, the scope and usage of the model and also the inherent and residual risk that the different dimensions of the model encapsulates.