MODEL VALIDATION & TUNING
Apply a risk-based approach to Model Validation and Tuning solutions to ensure ongoing due diligence and challenge fitness for intended purpose to mitigate and remediate risk within end-to-end compliance risk models
Systems risk assessment, identifying high risk behaviours and transactions and performance parameters.
Optimising system performance within vendor parameters.
Independent Model Validation
Providing regulatory assurance and full system remediation/resolution or mitigation of risk.
Specialist bespoke validation and tuning of Fircosoft Transaction Screening and Customer Screening systems.
Our Model Validation and Tuning Solutions
Our solutions for Model Validation and Tuning aim to uncover areas of inefficiency and opportunities for risk management and mitigation. We work with our clients to understand their risk appetite and thresholds, to offer diligent and robust solutions that increase effectiveness without having a negative impact to true matches.
False positive alerts significantly constrain stakeholders within the regulated sector, which is where our validation and tuning solutions come in to reduce noise and support more well-rounded compliance operations.
High level system risk assessment outlines areas of risk and performance within a system, unlocking the potential for our clients to undergo either an optimisation process or a full risk mitigation and remediation strategy across Customer Due Diligence/Know Your Customer and Transaction Monitoring Programs. By identifying and understanding the risks associated within the system, our subject matter experts work with our clients to outline and deliver a full implementation strategy to achieve our client’s effectiveness and efficiency goals.
Working within the confines of the client’s system and the set vendor parameters, our model tuning service aims to observe and identify the all parameter values that can be optimised to achieve greater overall effectiveness and efficiency. Once we have delivered our optimisation solution our client’s systems operate in line within their systems theoretical capability and regulatory expectations, as well as meeting or exceeding global averages. Our model tuning solutions can be applied to a variety of end-to-end AML compliance models, including customer and transaction screening and transaction monitoring models, and aim to achieve a level of optimisation without a material impact or moderating the underlying frameworks or methodologies.
Independent Model Validation
Designed to challenge all material mathematical and statistical assumptions made in the model design, our independent model validation assesses the appropriateness of each methodology chosen to implement, and the handover points between different modules of the system, for any model risk that they might be posing. By building challengers to ensure that the techniques chosen to model real life data are best suited for the task at hand and creating extensive stress-test frameworks that allow us to identify if and when the system will fail and what the impact of failure will be, we identify whether the system is fit for the intended purpose and propose how we can improve the system by implementing a full mitigation or remediation strategy. We support our clients in the maintenance of their systems, including risk assessment reports to communicate directly with the regulator or governing body and independent validation, providing an improved level of assurance.
Fircosoft Validation and Tuning
Fircosoft is a renowned software provider for customer and transaction screening, used by many financial institutions worldwide to deliver improved performance and efficiency. Our specialist solutions help FIs to assess, evaluate and tune their Fircosoft screening systems by providing expert advice on system enhancements to reach a balance between effectiveness and efficiency; meeting regulatory requirements and ensuring the systems are in line with the FIs own appetite for risk. We are able to provide a bespoke, iterative solution, which can be implemented in full or partially depending on our client’s requirement for initial or ongoing tuning.
Our approach to model tuning and validation follows a distinct process, based on the risks associated with our client’s system.
Following the systems risk assessment we can implement either an optimisation exercise using our model tuning approach or work towards delivering a full risk mitigation or remediation strategy with recommendations concluded from model validation. We are able to work with the confines of a number of vendor systems, including but not limited to being specialists in Fircosoft model validation and tuning.
We follow a mathematical and methodical approach to tuning, which aligns system performance, identifies tuneable parameters and delivers an optimised system of greater effectiveness and efficiency.
Outside the confines of our client’s system, our four part independent model validation challenges fitness for intended purpose by applying appropriate model benchmarking frameworks that uncover weaknesses within the model design. By applying both quantitative and qualitative challenger methodology, our process and solutions go further to identify areas for remediation.
As an independent, unbiased specialist we also provide a level of assurance to our clients, which can be communicated to the regulator that ensures the client is aligned in terms of governance and best practice, as well as guaranteeing that the risks within the system are driven to within acceptable levels.
For clients working specifically with Fircosoft systems are also offer a bespoke optimisation and remediation service. Speak to our expert team for full details on how our experts deliver this solution.
Our solutions can be applied across a variety of end-to-end AML and compliance risk models:
Fraud Detection Models
Customer Risk Rating Models
Market Abuse Models
AML Profiling Models
Adverse Media Search Models