SAN DIEGO, CA–(Marketwired – January 06, 2017) – PointPredictive, Inc. today launched its new Independent Model Validation and Risk Review service to help lenders comply with the Office of the Comptroller of the Currency (OCC) SR 11-7 Guidance on Model Risk Management, a guidance requiring banking organizations to evaluate the soundness of their risk models and monitor models over time to ensure they are performing as intended.
The new service delivers independent validation of current risk models on an annual basis and provides lenders a service to test multiple vendor models side-by-side to determine which model or combination of models works best on their lending portfolio to mitigate losses. The service focuses primarily on model-based Fraud Solutions and Automated Valuation Models (AVMs) that are widely used by lenders today.
“Our experience in modeling is extensive and spans the mortgage, automotive, and banking industries. Our scientists and fraud experts have built sophisticated machine learning models and garnered leading market share in detecting mortgage application fraud, mortgage backed securities fraud, and credit/debit card fraud as well as automotive application fraud, early payment default risk and dealer fraud. This puts us in a unique position to help lenders validate their current models,” says Tim Grace, CEO of PointPredictive. “It can be a daunting task for lenders to validate their models annually, and many do not have the experience in fraud modeling to understand how well a model is working. Now, they can cost-effectively outsource that task to our fraud experts and PhD scientists.”
The service provides lenders with three components:
1. Annual Validation of Mortgage Fraud Models and AVMs — Assist lenders in confirming that the models are appropriately implemented and are being used and performing as intended by using historical data and measuring the statistical soundness of the models.
2. Benchmark Model Testing — Assist lenders during vendor evaluations by analyzing model results, benchmarking those results and providing an independent assessment as to which model(s) or combination of models perform best and are statistically sound.
3. Gap Validation — A business review by PointPredictive fraud and business consultants to validate that the models are being used optimally within their operations area(s).
“The OCC guidance indicates that model validation should be conducted independently by someone not having a vested interest in whether a model is determined to be valid,” explains Joe Jackson, Head of Partner Relations for PointPredictive. “As a proven trusted provider, we are being approached by lenders to do this validation because we are unbiased and our cross-industry visibility enables us to recommend approaches to operationalize the outcomes.”
The Model Validation Service is available immediately to the mortgage industry and inquiries can be made to Kathleen Waid at [email protected].