Large Institution Validation

Darling Consulting Group (DCG) is a recognized leader and premier provider of independent risk management consulting and regulatory-compliant model validation services to large financial institutions. Our validations align with regulatory model risk management guidance (OCC Bulletin 2011-12, Federal Reserve Board SR 11-7, and FDIC FIL 22-2017).

For nearly 40 years, clients of all sizes have benefited from our expertise as model practitioners and validators – including many of the largest financial institutions in the U.S. and Canada.

DCG is proud to provide independent, third party model validation services that our clients rely upon not only to cover regulatory requirements, but also to help them construct best-in-class models. This validation insight aids in the development (and confirmation) of risk management approaches and strategic planning.

What We Do

DCG has expertise in over 30 different financial and operational risk models. Below is a list of our most common validation requests:

  • Current Expected Credit Loss (CECL) Model Validation – DCG utilizes a 12-part CECL model validation scope, including a deep look at model governance, data inputs, conceptual soundness, calculation methodology, qualitative factors, model testing, model reporting and model implementation.
  • Credit Model Validation – DCG’s credit model validation provides a comprehensive review of the PD and LGD methodologies at your institution, including assessments of the input data, statistical techniques, model outputs, model testing and risk rating procedures.
  • ALM Model Validation – DCG is a leading provider of comprehensive Asset Liability Management (ALM) model validations that addresses all aspects of an ALM modeling including data integrity, management, model structure, configuration, third-party model integration, assumption support, governance and ALCO reporting.
  • Capital Stress Testing (DFAST) Model Validation – DCG provides comprehensive Dodd Frank Act Stress Testing (DFAST) model validations to financial institutions, featuring an independent evaluation of the statistical approaches, credit scoring models, pre-provision net revenue (PPNR) models, ALLL models, ALM model integration, model aggregation and reporting.
  • Liquidity Risk & Funds Management Review and Model Validation – DCG’s liquidity risk-related review services and validations range from standalone model validations to encompassing assessments of your entire liquidity risk and funds management process.
  • Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Model Validation – DCG understands the challenges that banks face with ever-changing regulatory expectations around BSA/AML models, including customer risk rating, enhanced due diligence, transaction monitoring, sanctions screening, and “know your customer” procedures.

For a comprehensive list of the various financial and operational risk models DCG’s team regularly validates, click here.

Who We Are

We are model developers. We are model risk management practitioners. We are validators. For over 40 years, we have led the industry in innovation and technology to meet our clients’ model validation needs. Observing market changes during the last recession, DCG expanded our model validation team to include even more dedicated, technical specialists and practitioners. As a result, the Quantitative Risk Analysis & Strategy (QRAS) team was formally created, with the sole purpose of providing high-quality model validation, advisory and education services to financial institutions of all sizes.

Whatever challenges you face, our team has the experience and expertise to collaborate with your internal model risk management and audit teams. We will provide you with the independent and horizontal perspective needed to develop best-in-class risk assessment and management practices.

DCG has provided model validation services to more than 40% of the banks in the mid-size market ($10-50 billion in total assets). In the past 5 years, 96% of DCG’s validation clients have come back for additional work after the initial engagement.

DCG’s team of validation experts is comprised of a select group of highly experienced quantitative risk management model developers and validators, data management and documentation specialists, former examiners and governance experts, and model risk management professionals. We built this validation team by bringing together core experts with a variety of experiences. Here are some of the highlights of our exceptionally talented 20+ member team:

  • Former Federal Reserve examiner who developed a leading MRM practice at a large U.S. bank
  • Master of Bioengineering who has 20+ years of financial modeling experience at a DFAST sized bank
  • Former regulator who was a core member of the FDIC’s strategic war gaming team
  • Physics Ph.D. who is a leading industry expert in mortgage and prepayment modeling
  • Statistician specializing in credit and CECL who is a top globally-ranked strategic card game player
  • …and many more!

Why Choose DCG

At DCG, we have motivated and client-first people. Our clients consistently provide feedback that we’re easy to work with and that we’re dedicated partners to them. We take the extra step to help our clients, from explaining advanced statistical concepts in plain language to digging through many versions of model code to trace a nasty error. In addition, our team leverages decades of business experience with each engagement.

DCG employs a team approach with every engagement. In addition to minimizing key-man risk for our clients, inclusion of this wider array of experiences, expertise, and perspectives ensures clients receive the very best validation with well-informed findings, recommendations, and best-practice suggestions. Every time you validate with DCG, you truly are getting our “A-Team.”

The stability of DCG’s validation team (with more than 95% retention over the past 10 years) is a testament to DCG’s commitment to maintaining a culture and work environment that attracts and retains the best specialists in the industry.  This team collectively has over 300 years of experience and thousands of models validated.

We have received feedback from model owners that they had never seen anyone with our level of patience as we worked through challenging model validation findings with groups from across the bank. At DCG, we believe that to be your partner, we have to work with everyone involved in the validation process: model owners, developers, MRM, and audit. While we offer an independent perspective, we also understand the business needs of each line of defense. We strive to be a true partner for you in your model validation efforts and show you the DCG difference!

 


Contact us to inquire about our services and learn more about the technical expertise and business sense that our QRAS team can provide to your institution.