The Role of Automated Validation in Meeting SS 1/23 Compliance Requirements

The whitepaper focuses on how financial institutions can meet the stringent regulatory requirements of the Prudential Regulation Authority’s (PRA) Supervisory Statement SS 1/23 using automated validation systems. SS 1/23 outlines five key principles that govern Model Risk Management (MRM), which include model identification, governance, development, independent validation, and risk mitigation. Complying with these principles requires comprehensive documentation, ongoing monitoring, and reporting, which can be resource-intensive for financial institutions.

Automated validation offers significant cost and efficiency benefits, such as reduced labor costs, improved accuracy, and enhanced scalability, making it easier to meet compliance requirements without increasing operational costs. Automation also accelerates the model validation lifecycle and ensures consistent standards, which is critical for regulatory audits.

It introduces Solytics Partners’ MRM Ecosystem (NIMBUS Uno + MRM Vault) as an automated solution that aligns with SS 1/23 requirements. The platform offers features like centralized model inventory management, governance and oversight tools, integrated development capabilities, independent validation workflows, and risk monitoring. Solytics’ system also supports data integration, no-code interfaces, and automated regulatory reporting, leading to faster compliance cycles and reduced manual workloads. The overall impact is measurable cost savings for financial institutions, thanks to automation, enhanced accuracy, and scalability.