Model Validation Services
Technical Experts in Model Validation
Our validation services go beyond the checklist to help institutions maximize its investment in their validation models. Through decades of experience with community banks and a commitment to the highest quality of training and expertise, we know that there isn’t a one-size-fits all approach to model validation. Our team includes former bank management and lenders who hold various designations, including Certified Loan Review Professional (CLRP) and Certified Regulatory Compliance Manager (CRCM) certifications.
We understand the value of providing objective model assessments along with practical insights to optimize model function and utilization, which we provide through
actual experience in validating numerous models and systems.
Current Expected Credit Loss (CECL) Model Validation Services
Our value-added approach and professional industry leadership provides your institution with the assurance of a comprehensive evaluation of the CECL Model to meet regulatory validation guidance as well as practical insight and recommendations to optimize model utilization.
Our validation approach incorporates current industry guidance and is designed to evaluate the following:
- Integrity of the model’s data, inputs, and assumptions
- Compliance with current authoritative guidance and accepted industry practices
- Overall utilization of the CECL Model, including reporting and governance
The scope of our validation covers key elements of the CECL model, including: - CECL Policy and Procedures
- Data controls – internal control review, third party uploads (if applicable)
- Loan segmentation
- Prepayment estimates
- Historical information
- Qualitative Factors (current conditions)
- Forward Looking Adjustments (reasonable/supportable forecasts) and reversion method
- Individually Evaluated Loans
- Credit losses related to off-balance sheet credit exposure
- Credit Losses related to HTM investments
- Output Analysis
- Reporting
- Monitoring
Bank Secrecy Act (BSA) AML Model Validation Services
Our value-added approach and professional industry leadership provides your institution with the assurance of a comprehensive evaluation of the AML Model to meet regulatory validation guidance as well as practical insight and recommendations to optimize system performance.
Our validation approach is designed to evaluate the following:
- Model performance and data integrity
- AML system support of the Bank’s BSA program
- Overall utilization of the AML system
The scope of our validation covers the core elements of the AML system, including:
- Support of the Bank’s BSA risk assessment
- Risk rating process
- Trend analysis – alerts supporting SARs
- Trend analysis – industry and other institutions
- Data feeds between AML system and other systems, including core processor
- Transaction code mapping
- Cross section of customer transactions
Interest Rate Risk (IRR) Model Validation Services
Our value-added approach and professional industry leadership provides your institution with the assurance of a comprehensive evaluation of the IRR Model to meet regulatory validation guidance as well as practical insight and recommendations to optimize model utilization.
Our validation approach incorporates current industry guidance and is designed to evaluate the following:
- Board of Directors and Senior Management Oversight
- Risk Management Process
- Bank’s risk controls and limits
- Bank’s risk identification and measurement procedures
- Bank’s IRR monitoring and reporting systems
The scope of our validation covers key elements of the IRR model, including:
- Policies and procedures to control the nature and level of interest rate risk
- System for identifying and measuring interest rate risk
- System for monitoring and reporting risk exposures
- System of internal controls, review, and audit to ensure the integrity of the overall risk management process
- Adequacy of the bank’s risk measurement system(s) given the nature, scope, and complexity of its activities
- Accuracy and completeness of the model inputs
- Reasonableness and validity of IRR scenarios and assumptions
Technical Experts in ACH Compliance
Our ACH audit services go beyond accessing your Institution’s compliance with National Automated Clearing House Association (NACHA) rules. Through decades of experience with community banks and a commitment to the highest quality of training and expertise, we look to offer practical insights to improve your institution’s internal controls and processes.
The scope of our ACH audits cover key elements of the NACHA rules for both financial institutions and third party senders, including:
- Article one: General rules
- Article two: Rights and responsibilities of ODFIs, their Originators, and Third Party Senders
- Article three: Rights and responsibilities of RDFIs and their Receivers
