Magazine

How AI Is Forcing Model Risk Beyond the Compliance Mindset

Generative and agentic AI are forcing organisations to rethink many of the assumptions underpinning traditional model risk management. Joe Breeden, President of the Model Risk Managers International Association, argues that model risk management should no longer be viewed simply as a regulatory requirement, but as a critical mechanism for protecting the value generated by AI investments. As AI capabilities become more autonomous and complex, financial institutions must adapt governance, validation and monitoring approaches to manage emerging risks while maintaining accountability, resilience and trust across the organisation.