26 February 2026
On the 19 February 2026, CRC partnered with the Model Risk Managers International Association (MRMIA) to host a comprehensive in-person session titled Fundamentals of Model Risk, bringing together regulators, industry experts, and scholars for a full-day exploration of one of the most pressing analytical challenges facing the financial sector today.
Why Model Risk matters
Models are central to decision-making across finance, analytics, and research, yet they are not infallible. Beyond routine testing and validation, models can embody incorrect assumptions, unstable specifications, shifting data environments, or improper application. Collectively, such vulnerabilities contribute to Model Risk, defined as the potential for loss resulting from the use of an unsound or misused model. As predictive analytics and machine learning expand in complexity and influence, a clear understanding of Model Risk is essential for robust decision-making, effective governance, and responsible innovation.
Building a strong foundation: Expert insight and practical guidance
CRC’s collaborative session engaged leading figures in model governance and quantitative risk, including:
- Dr Diederick Potgieter, Senior Technical Specialist in Capital Management at the Prudential Regulation Authority (PRA), Bank of England
- Christian Duesterberg, Risk Management Consultant with over 26 years’ experience in financial services
- Dr Alan Forrest, CRC Business Associate, MRMIA Board Member, and former senior model development and validation lead at Virgin Money UK, Royal Bank of Scotland, and Halifax Bank of Scotland
- Additional international experts in model risk and quantitative risk management
Through structured beginner sessions and an in-depth panel discussion, participants gained insight into how Model Risk manifests across modelling approaches, from classical statistical frameworks to advanced machine learning and generative AI. Indeed, the session included examples from law and engineering as well as financial services. Presentations examined how Model Risk is understood and regulated in the UK financial services sector, how seasoned practitioners identify and assess risk within model lifecycles, and how a Model Risk mindset enhances transparency, trust, and operational resilience.
Lukasz Szpruch, Professor at the School of Mathematics, the University of Edinburgh, and the Programme Director for Finance and Economics at The Alan Turing Institute, the National Institute for Data Science and AI, and Dr Maria Kalantzaki, Senior Validation Manager in Novel Financial & Non-Financial Risk at Virgin Money joined the evening session as panellists.
The featured discussion, moderated by Dr Alan Forrest, brought together regulators, academics, and industry leaders to reflect on both conceptual and practical dimensions of Model Risk. The panel session encouraged open dialogue under Chatham House rules, emphasising real-world implications and cross-sector learning.
Thought leadership that makes an impact
Events such as Introduction to Model Risk are not simply educational forums; they play a structural role in shaping how risk is understood and managed across the financial sector. By bringing regulators, industry leaders, and academics into the same room, CRC helped strengthen a shared language around Model Risk — one that moves beyond compliance toward deeper analytical accountability.
The discussion reinforced that Model Risk is not a niche technical concern, but a foundational element of modern decision-making. As modelling becomes more complex, particularly with the rise of AI and machine learning, a disciplined approach to identifying assumptions, understanding limitations, and communicating uncertainty becomes central to institutional resilience. By foregrounding these principles, the event contributed to embedding Model Risk thinking more firmly within professional practice.
Importantly, the collaboration between CRC and MRMIA demonstrated how academic insight and regulatory experience can jointly influence industry standards. Financial institutions increasingly operate in environments where model governance is both a regulatory requirement and a strategic necessity. Events like this support the cross-fertilisation of ideas and diffusion of best practice across organisations, helping practitioners adopt more structured, transparent, and defensible approaches to model development and deployment.
In doing so, CRC’s work extends beyond convening discussion - it contributes to shaping expectations, strengthening governance cultures, and supporting more robust, trustworthy analytical systems across the market.
Looking ahead
CRC remains dedicated to advancing research and practice at the intersection of credit risk, analytics, and financial services. Through events like Fundamentals of Model Risk and our ongoing Village Hall series Let’s Talk About, the CRC is proud to serve as a neutral hub for open and critical discussions.
The Credit Research Centre extends our heartfelt gratitude to MRMIA for sponsoring this event.