How well a financial services firm fares in a crisis isn’t down to luck. A large part of their success likely depends on the robustness of their model risk management (MRM) processes. By continually refining their approach, forward-thinking firms are setting the standard across the industry amid a shifting regulatory landscape.

Whether a firm is ahead of the curve or playing catch-up in MRM strategy and practices, there are five MRM best practices that can help them drive continuous improvement.

1. Take an interconnected approach.

A 2019 PwC report noted that firms’ “ultimate goal is a MRM framework fully embedded in business decision-making,” while in a global MRM survey report from McKinsey, published in 2021, half of respondents indicated that “automation [is] the most important approach for improving validation efficiency.”