In this interview, Pablo Salazar outlines the core components of an effective Modern Risk Management (MRN) program, focusing on preparation for rigorous regulatory scrutiny.

He highlights the need for comprehensive policies, an up-to-date inventory, continuous monitoring, and strong challenge mechanisms to meet higher expectations as institutions scale. Salazar stresses that MRN should be seen as a valuable tool, not just a regulatory checkbox, with effective challenge fostering improvements in model performance and decision-making.

Salazar further discusses strategies for ensuring MRN success within financial institutions. He suggests that while outsourcing high-risk model validations to experienced consultants can be beneficial, transitioning low to moderate-risk validations to an internal team can offer long-term advantages.

Additionally, Salazar advocates for building trust across departments by actively engaging in committee meetings and early phases of model development, ensuring MRN professionals are seen as vital contributors rather than mere compliance enforcers.