Global Model Practice Survey 2011
Growth through Model Control
Deloitte’s Global Model Practice Survey (GMPS) 2011 provides insight into the maturity of model practice within financial institutions. This survey focuses on the developments in the areas of the various elements of the model life cycle. The survey was conducted during the second half of 2011 and had the participation of 89 financial institutions from all around the world.
Models are at the heart of financial institutions, since they can be powerful tools in assessing risk and improving decision making. The financial crisis taught financial institutions that simply relying on the outcome of models is a risk itself. Therefore, understanding the risks, their limitations and the economic environment is critical when using models.
Key findings of the 2011 survey
- 25% of the respondents consider rejecting a model to be challenging;
- Around 15% of the respondents never reject a regulatory model;
- About half of the respondents indicate to have no expert judgment, data quality, or model implementation policy or consider the quality of these policies to be poor;
- Around 20% of the respondents indicate that the ownership of the model governance framework is not unambiguous and another 20% of the respondents indicate that the ownership is assigned to a department that is part of the framework itself.
The survey results illustrate that respondents face difficulties with enhancing their model practice to a sound standard. Based on this generic observation our modelling team has designed a comprehensive set of key criteria and converted these criteria into a leading practice checklist, which may serve as a handle for enhancing your model practice standards. This checklist can be found in the Appendix to the report.
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Also the reports of previous years are available. For these reports we refer to ‘Reports previous years’ at the right-hand side of this page.
Deloitte’s Modelling team has the knowledge and experience to help you with your modelling issues. The team already developed, validated and implemented many models and model policies in the financial services industry.