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Gen AI - The Model Risk Dilemma No One’s Solved … Yet
As financial firms race to integrate GenAI into model documentation, research and analysis highlights the complex, evolving art of validating AI with AI.
May 22, 2025
Andreas Simou
Andreas Simou, Managing Director, Center for Financial Professionals
Tags: Model risk
Gen AI - The Model Risk Dilemma No One’s Solved … Yet
The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
  • ValidMind presented a GenAI use case for automating test result interpretations in model risk
  • Interpretations combine general test explanations with specific result analysis
  • Subjectivity in technical narratives makes consistency and compliance difficult
  • Metric-based tools like RAGAS offer scalable evaluation but rely on models to judge models
  • Historical benchmarking and human-in-the-loop feedback improve quality
  • Modular testing, like numeric consistency checks, reduces hallucinations
  • Validation now requires interdisciplinary collaboration across legal, tech and compliance teams
  • GenAI updates demand agile inventory management and adaptive workflows
  • Transparency and traceability are critical for regulatory acceptance
  • Best practices blend automation with human oversight for scale and accuracy
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