Model risk
Banks building GenAI governance in parallel to model risk
Risk Benchmarking: Majority have established AI governance committees, but ownership is fragmented
Agentic AI set to drive end-to-end automation of MRM workflows
Risk Live: Validator role likely to shift towards oversight and expert judgement
Model risk managers are being asked to do more with less
Risk Benchmarking study finds function being handed expanding AI workload, on flat resources
A third of banks do not maintain logs for GenAI models
Risk Benchmarking study finds few banks review prompt logs systematically, with larger firms focusing on higher risk use cases
From gatekeeper to coach: model risk bids to reinvent itself
Model Risk Benchmarking data reveals a function in flux, grappling with resource cuts, AI models, regulatory divergence
Treat AI models as would-be hackers, says quant
Risk Live: Models capable of “strategic deception” require different risk management, says former Risk.net quant of the year
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
AI use fastest-growing area of op risk regulatory scrutiny
Risk Benchmarking study finds EU AI Act the dominant driver of nascent bank risk frameworks, even well beyond Europe’s borders
Second line seeks to stamp its authority on AI risk
Risk Benchmarking study finds fragmented accountability for AI risk among banks, and most are short of controls to contain it
Op Risk Benchmarking: Banks seek a home for AI risk
Risk.net’s 2026 study sees record participation and collective unease, as banks race to incorporate AI into op risk frameworks
Regulators question human-in-the-loop as AI governance tool
Bank of England and FSB executives suggest it’s more important to retain overall accountability
MI9: runtime governance for agentic AI systems
A real-time telemetry system for banks to control and authorise for agentic AI actions
Banks in Asia turn to integrated third-party risk units
Regional and global firms create centres of excellence bridging first and second lines
All models are wrong. Some might be OK!
The authors investigate three key sources of model uncertainty and potential difficulties in addressing them.
Do banks still need to validate GenAI models?
Regulators carved out GenAI models from new risk guidance. Banks shouldn’t see this as a reason to stop validating them.
In simplifying credit risk models, EBA could compound capital costs
Skipping hard yards of internal ratings-based approach might trip higher capital charges and implementation costs
Barclays built a risk framework for GenAI from scratch
Eleven teams contribute to assessing generative AI use cases in a system that includes 35 controls
Hopes, fears and ‘mass confusion’: the sudden end of SR 11-7
Banks welcome chance to prioritise model reviews, but fret over future policy changes and AI
MRM: how banks are scaling models in the age of AI
MRM capabilities are evolving to ensure compliance while helping organisations retain a competitive edge
AI risk management and the shift to capability control
By reframing validation, banks can align innovation with regulatory demands and maintain robust risk discipline, argues risk manager
In the age of GenAI, why do we still need good models?
Jean-Philippe Bouchaud says models can guide artificial intelligence through regime shifts and away from overfitting