Overrides
Contents
Definition
Overrides are the manual (human) interventions that aim to overrule and amend a decision, course of action or outcome that has been determined on the basis of an automated decision process. Overrides are a regular feature of credit rating systems and credit scoring systems, reflecting various operational limitations and Model Risk
Overrides can be categorized according to the nature of the intervention (modification, cancellation), the Risk Appetite of the intervention (accepting a rejected risk or rejecting an approved risk)
High-Side Overrides
A high side override is the overruling of an automated decision system where the risk is being rejected even though the system presents it as within the desired risk perimeter. For example rejecting a new customer, a new loan etc. even though the automated decision indicates it should be accepted.
Low-Side Overrides
A low side override is the overruling of an automated decision system where the risk is being accepted even though the system presents it as outside the desired risk perimeter. For example accepting a new customer, a new loan etc. even though the automated decision indicates it should be rejected.
Issues and Challenges
- Overrides provide essential information about the performance of an automated system. The recording, interpretation and utilization (where appropriate) of override data is an essential element for containing model risk. This is best achieved with a formal Override Report (or report section).
