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How AI is reshaping model risk governance

Alex Jones, offering manager at IBM Watson OpenScale, charts the rise of artificial intelligence (AI) and machine learning in model development and discusses the challenges of these technologies in relation to model risk governance. Among the key issues Jones raises are the difficulties of explaining increasingly complex ‘black box’ algorithms, the risks of model bias due to unintentional correlations and how real-world data can present problems for outdated models.

A combination of AI and next-generation governance, risk and compliance tools can be deployed to monitor and validate model risk management activity. “There’s almost no problem that people aren’t trying to tackle with AI and machine learning,” says Jones.

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