AML Model Validation: A Critical Need in the New Regulatory Environment

This training program will discuss the history and origin of a model validation. It will also discuss the requirements by the OCC for a model validation, and what exactly a model validation should include. The session will also analyze the elements of a model validation to know what to look for in an RFP, and detail the requirements included in Final Rule 504.

Why Should You Attend:

According to the Office of the Comptroller of the Currency (OCC), “banking organizations should conduct a periodic review-at least annually but more frequently if warranted-of each model to determine it is working as intended and if the existing activities are sufficient.” This has become known in the industry as a model validation, system validation, independent verification and validation (IVV), or just validation. The challenge we’ve seen is interpreting this – what is a model, which models, what a “review” should include, etc.

As such we’ve seen a number of organizations conduct one, either internally or independently, often missing elements to the model that couldn’t possibly validate an institution’s model without them. Further, pushing regulators to require that institutions repeat their model validation.

This webinar will cover a number of topics: the history of a validation – where it comes from, what it means according to the OCC, what elements should a model validation include, the importance of conducting one, how often one should be conducted, what to look for in an RFP, vendor due diligence and the requirements included in Final Rule 504.