RPA for Model Risk Management
Model Risk Management (MRM) is the holy grail for banks and financial institutions, as it helps ensure that the workflows and checks and balances in their risk processes are robust enough to meet obligations and challenges. MRM teams have started to look at the use of robotic process automation (RPA) to help ensure that their models are meeting regulatory requirements and the bank’s financial standards.
RPA for Model Risk Management
Traditional MRM currently suffers from slow and error prone processes, failed tests and threshold breaches, and disjointed workflows. However, integrating RPA into existing processes can help alleviate these challenges.
RPA provides the following strengths to the MRM process:
- Compatibility across model types
- Optimizes workflows
- Shorter TAT and enhanced quality
In this guide, we will discuss how RPA can help alleviate the pressures your MRM team faces.
Optimizes workflows
RPA has the power to combine several applications (such as vendor platforms, Word, and Excel templates) into one automation to produce 80% ready testing. Additionally, RPA bots can perform multiple use cases such creating tables and audit trails, pasting screenshots, etc.
Compatibility across model types
RPA bots are able to overlap amongst similar models such as VaR and Market Risk Testing (GMS) Models, and Z-factor (Systematic Credit Risk) based PD and CECL Models. These automations are also greatly compatible with a large range of models with high security risks, and can even increase the utilization of vendor models due to the ability for RPA bots to work 24x7 when running model monitoring tests.
Shorter TAT and enhanced quality
Due to the combination of RPA bots and spreadsheets, several different tests can be run and re-run resulting in shorter turnaround time. The quality of these tests are also enhanced, as RPA bots can be trained to scan tolerances and flag breaches, which gives MRM teams more bandwidth to focus on making decisions and analyzing the information.
Conclusion
Incorporating RPA into your MRM processes can be a great asset to your MRM teams since it eliminates a lot of the problems that traditional MRM suffers from. Contact mrmsolutions@evalueserve.com to get in-touch with an expert and see a detailed break down of how RPA works in MRM processes.
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