Model Risk Management (MRM)

Model risk management (MRM) is the framework banks and insurers use to validate, monitor, and govern statistical and AI models that affect consequential decisions. Canadian OSFI Guideline E-23 and US Federal Reserve SR 11-7 are the dominant frameworks. AI deployments in regulated finance need an MRM-aligned validation report, ongoing performance monitoring, and clear human-in-the-loop boundaries before they touch any decision affecting consumer credit, insurance, or capital.