With most conference events in 2020 migrating from their traditional physical environments into the digital realm, so it was the case for the Symphony Innovate 2020 event, which saw participants congregate online in a reflection of changing work habits and patterns associated with the global pandemic.
COVID-19 has challenged the robustness of banks’ model risk management and EUC policies. In a context where market behaviors are uncertain and changing rapidly, banks need to adapt their approach to model risk management in order to keep business running as usual, whilst maintaining the quality of their pre-pandemic controls.
Beginning in the early 2000s, when the algorithms and software capable of performing transaction cost analysis (TCA) on a semi-automated basis first became prevalent, the definition of the function was always: a method of determining the effectiveness of a set of transactions performed by a counterparty – the key word within that definition being ‘effectiveness.’
For many years now, public and regulatory interest in misconduct by individuals within financial services firms has been high and shows no signs of abating in the current climate.
In Europe, the US Federal Reserve (FED) and the US Office of the Comptroller of the Currency (OCC)’s Supervisory Guidance on Model Risk Management (SR 11-7) is accepted as the global standard for the application of model risk management (MRM).
