Model Failure

From Open Risk Manual


Model Failure is an operational outcome where a deployed model is found to have serious flaws, obvious and significant bias, is not compliant with regulations etc.

Preemptively and as a means to control more adverse outcomes, a model validation outcome can fail a model that is newly developed or already in production, prompting model redevelopment.

Issues and Challenges

  • Objective criteria for defining model failure may not exist in the absence of empirical backtesting possibilities