Expanding regulatory scrutiny: A practical approach to non-models and DQMs
As regulatory expectations around Model Risk Management (MRM) evolve, the scope is widening to include “non-models” and Deterministic Quantitative Methods (DQMs)—tools that may not meet the formal definition of a model but can materially influence business decisions and expose institutions to significant risk.
This POV explores how financial institutions can practically and proportionately bring non-models and DQMs under the MRM umbrella, balancing regulatory expectations with operational realities.
What’s inside?
This POV provides a structured, actionable roadmap for integrating non-models and DQMs within the MRM ecosystem, covering:
Key takeaway
Regulators don’t expect identical treatment of models and non-models, but material non-models must be governed with proportionate guardrails. A thoughtful, phased approach can help institutions strengthen governance, optimise resources, and enhance regulatory confidence.
Nikhil Bedi
Asif Lakhani
Subrahmanyam Oruganti
