Managing AI models is reshaping three lines of defence, say banks

Risk Live: Model managers want seat at table during development, and expect first line to take charge of AI model testing

The job of managing artificial intelligence models is challenging the traditional three lines of defence framework, say risk managers, with some calling for the first line to take on more formal responsibility for continuous testing and monitoring of AI models.

With financial risk models, traditionally, a bank’s model validation team creates a challenger model, and in some cases also does part of