Description
Independently assess, test, and document financial models for risk, pricing, valuation, and forecasting to ensure conceptual soundness, data integrity, implementation accuracy, and performance. Execute validation plans with benchmarking, backtesting, stress and sensitivity testing, and provide effective challenge, findings, and remediation guidance to meet model risk management and regulatory standards.
- • Develop and maintain model validation plans, test scripts, and documentation in line with MRM policy.
- • Perform conceptual soundness reviews of model theory, assumptions, design, and limitations.
- • Validate input data lineage, quality, representativeness, and transformations.
- • Independently reconstruct or benchmark models using alternative methods or challenger models.
- • Execute backtesting, out-of-sample testing, and performance monitoring analyses.
- • Conduct sensitivity analysis and stress testing under extreme but plausible scenarios.
- • Review implementation through code inspection, numerical checks, and dependency verification.
- • Verify calibration procedures and parameter estimation methods.
- • Assess model changes and revalidate updates per change management standards.
- • Produce validation reports with findings, severity ratings, and remediation recommendations.
- • Track validation issues, remediation actions, and closure evidence.
- • Collaborate with model owners, quants, risk, and audit to communicate results and challenge assumptions.
- • Validate pricing and valuation models for trading and banking books, including derivatives and xVA.
- • Validate market, credit, and liquidity risk models, including VaR and stress testing frameworks.
- • Validate forecasting and capital models such as PD, LGD, EAD, CECL, and IFRS 9.
- • Validate portfolio construction, optimization, and performance attribution models.
- • Define monitoring thresholds and KPIs; review ongoing model performance and triggers.
- • Set and enforce documentation standards and maintain accurate model inventory metadata.
- • Review governance and regulatory compliance; support audits and regulatory examinations.
- • Evaluate third-party/vendor models and assess external data sources.
- • Research emerging methods and tools to enhance validation techniques and libraries.
- • Validate ESG and climate risk models, including carbon pricing and physical/transition risk impacts.
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Financial Services
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Tasks & skills:
O*NET occupational data (work activities, skills, knowledge).
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This site includes information from O*NET by the U.S. Department of Labor, Employment and Training Administration (USDOL/ETA), used under the CC BY 4.0 license. Career Clutch has modified some of this information for student readability. USDOL/ETA has not approved, endorsed, or tested these modifications. O*NET® is a trademark of USDOL/ETA.
Last reviewed: Jan 2026
