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Reviewed visual · version 1

RS Glossary

Model Risk Management

Model risk management is the discipline of identifying, assessing, controlling, validating, monitoring, and governing risks created when decisions depend on models.

Review state
Reviewed in POC
Freshness
Current
Version
2
  • Model Risk Management
  • MRM

Remember it this wayManage the risk of relying on the model across its whole life.

In plain language

MRM treats a model as something that can be wrong, misused, misunderstood, or become unsuitable over time. It establishes lifecycle responsibilities and evidence for deciding whether reliance is acceptable.

Why it matters

AI systems can expand model use beyond traditional quantitative settings. Organizations need risk practices that account for both the model and its surrounding workflow.

Example

A bank independently validates a credit model, documents limitations, monitors performance, controls changes, and defines escalation when thresholds are crossed.

Common misconception

Model risk management is not only a one-time accuracy test. It includes intended use, implementation, governance, monitoring, change, and retirement.

Related terms

Sources

Learn more

  • Connect lifecycle controls to [[model-drift|Model Drift]] and [[independent-verification|Independent Verification]].

Public history

45 recorded events · 45 public summaries

  1. A potential shared concept was discussed and selected for initial glossary drafting.

  2. The captured candidate received a complete initial draft and entered section-level human review.

  3. Radar reviewed the initial definition draft for human consideration.

  4. Radar reviewed the initial plain-language-explanation draft for human consideration.

  5. Radar reviewed the initial why-it-matters draft for human consideration.

  6. Radar reviewed the initial example draft for human consideration.

  7. Radar reviewed the initial common-misconception draft for human consideration.

  8. Radar reviewed the initial remember-it-this-way draft for human consideration.

  9. Radar reviewed the initial related-terms draft for human consideration.

  10. Radar reviewed the initial sources draft for human consideration.

  11. Radar reviewed the initial learn-more draft for human consideration.

  12. A proposal was opened for section-level human review while preserving the current version.

  13. A human reviewer opened a proposed revision while preserving the current approved or captured version.

  14. definition approved by a human reviewer.

  15. plain-language-explanation approved by a human reviewer.

  16. why-it-matters approved by a human reviewer.

  17. example approved by a human reviewer.

  18. common-misconception approved by a human reviewer.

  19. remember-it-this-way approved by a human reviewer.

  20. related-terms approved by a human reviewer.

  21. sources returned for revision.

  22. learn-more approved by a human reviewer.

  23. Requested wording was prepared without changing approved or existing sections.

  24. Radar reviewed the pending sources section for human consideration.

  25. Radar must rereview the complete model-risk-management term after an accepted text change.

  26. Radar must rereview the complete model-risk-management term after an accepted text change.

  27. Radar must rereview the complete model-risk-management term after an accepted text change.

  28. Radar must rereview the complete model-risk-management term after an accepted text change.

  29. Radar must rereview the complete model-risk-management term after an accepted text change.

  30. Radar must rereview the complete model-risk-management term after an accepted text change.

  31. Radar must rereview the complete model-risk-management term after an accepted text change.

  32. Radar must rereview the complete model-risk-management term after an accepted text change.

  33. Radar must rereview the complete model-risk-management term after an accepted text change.

  34. sources approved by a human reviewer.

  35. sources approved wording became the current section text.

  36. All section gates are approved; content version 2 is now a fully approved term.

  37. Radar rereviewed the human-approved definition wording for this exact version.

  38. Radar rereviewed the human-approved plain-language-explanation wording for this exact version.

  39. Radar rereviewed the human-approved why-it-matters wording for this exact version.

  40. Radar rereviewed the human-approved example wording for this exact version.

  41. Radar rereviewed the human-approved common-misconception wording for this exact version.

  42. Radar rereviewed the human-approved remember-it-this-way wording for this exact version.

  43. Radar rereviewed the human-approved related-terms wording for this exact version.

  44. Radar rereviewed the human-approved sources wording for this exact version.

  45. Radar rereviewed the human-approved learn-more wording for this exact version.

Source: vault/Glossary/terms/model-risk-management/term.md · sha256:705918940114e3f00a5282a100a970f5bca6c13f260bbc7cd175e1b4e75f8ed5 · Release: rs-glossary-glossary-team-poc-0.5.5-2026-09-02