One area of strong discussion was about the way EUCs support business modeling, whether for investment management, portfolio management or the overall management of the business. Henry highlighted how organizations were turning to their modeling teams to help chart a way forward for the business out of the pandemic.
He emphasized the way that issues like a second COVID spike, a slow recovery versus a swift recovery, or the use of negative real interest rates all presented different challenges to the business. These were presenting model teams the opportunity to help senior management understand their options and make informed decisions.
In response, Jon and Igor both emphasized how regulators, through regulations like SR 11 7 in the US and SS3/18 in the UK, were driving enhanced Model Risk Management (MRM) as a means of ensuring that the models, their data, and their change management were fully transparent and auditable. Jon emphasized the need to apply MRM to third-party models, where appropriate, using effective vendor risk management.
The need for EUC management frameworks
Deepa applied her experience in implementing EUC management frameworks to help organizations draw up a blueprint for better EUC management. Her first point was to form a centralized inventory to help standardize definitions about what a model is, and its importance to the business. She also emphasized the need to educate the business about the risks and significance of EUCs, and the need to manage them well, to provide consistency, accuracy and full transparency.
The significance of this was emphasized by a poll result during the session which suggested that 40% of those attending had a centralized EUC inventory, reflecting the importance of a centralized management framework, as well as the progress other organizations still need to make.