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BSA/AML Model Validation
Model validation is the set of processes and activities intended to verify that models are performing as expected, in line with their design objectives and business uses. Effective validation helps ensure that models are sound. It also identifies potential limitations and assumptions and assesses the possible impact for the Bank. All model components, including input, processing, and reporting, will be subject to validation.
There is regulatory expectation that model validation standards from the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC be applied to all models used at any financial institution. 3PR's Model Validation Services are part of the Management Information System Audit requirements set forth in the FFIEC BSA/AML exam manual.