- Model Risk Management (MRM) at HSBC is structured as a global function, headed up by the Chief Model Risk Officer (CMRO). The MRM function reports directly to the Group Chief Risk and Compliance Officer (GCRCO) ensuring its independence from the model developing and owning areas of the firm.
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MRM are the second line of defence (2LoD) for Model Risk and the CMRO is the global Model Risk Steward for the group and is also accountable for the global operation of the MRM function. MRM teams are based in each region, to ensure local subject matter expertise and to guide, review, and challenge. MRM activity is managed on a global basis as many models are used in multiple locations. This enables MRM to operate consistently and efficiently globally, and to take account of additional local regulatory requirements.
MRM is comprised of four key activities:
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Model Risk Governance - Setting the firm's model risk policies and standards, ensuring that model risk is managed within the approved tolerance levels, providing second line assurance on the implementation of policy, and monitoring regulatory developments impacting model risk.
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Model Risk Stewardship - Facilitating responsible development, understanding and use of models and analytics, as well as providing subject matter expertise, advice, guidance, and effective challenge across all entities, regions, global businesses, and functions.
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Independent Model Validation- Independently reviewing and (re)validating models, providing an objective, unbiased and critical opinion on the suitability and soundness of models for their intended use and the accuracy, relevance and completeness of outputs used to inform business decisions.
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Infrastructure - provides specialist technical expertise and are responsible for delivery of infrastructure and reporting capability used across all geographies, business, and functions to support the effective management of model risk.
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There is also a small Professional Practises team reporting directly to the CMRO who provide feedback and quality assurance on validation deliverables, ensuring consistency and facilitating the sharing of internal and external best practises.
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Independent Model Validation is a specialist quantitative role within the Model Risk Management team responsible for carrying out independent validations of HSBC’s model landscape, in order to identify and communicate model limitations and issues.
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Independent Model Validation provides independent challenge of a model’s underlying theoretical assumptions and limitations, its practical implementation, its live application and business usage, providing stakeholders (including model users, senior management, audit and regulators) with assurance that models and tools developed, maintained and used within HSBC Group are fit for their intended purposes and are compliant with applicable internal and supervisory expectations. They will also review remediation plans and activities, undertake portfolio level reviews across model types and challenge the model owners on the appropriate application of relevant policy of models.
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Model types include but are not limited to Credit Risk models (Retail and Wholesale), IFRS9 models, Stress Testing and Scenario Analysis models, Economic Capital models, Financial Vulnerability models, Pricing models, Traded Risk models, Insurance Risk models and models covering non-financial areas e.g., transaction monitoring, customer selection and human resources. This includes the traditional model types as well as modern approaches such as machine learning (ML) and artificial intelligence (AI) techniques.
In this role, you will:
Principal Accountabilities and Responsibilities:
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The Model Risk Lead, Retail IFRS9 will be responsible for an area with high strategic importance to HSBC in terms of business priority, financial balance sheet implications and degree of potential regulatory censure.
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Through effective stakeholder management and liaison with Global Businesses and Functions; plan, prioritise and deliver independent reviews and assessments for models developed and used with the area, ensuring that decisions are based on delivering 2LOD accountabilities and taking account of key business priorities.
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Support model review work for other areas of the Bank where required.
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Support the Global Head of the Function by ensuring that potential model risk issues, impacts to risk appetite, Internal and external audit findings and regulatory issues are managed appropriately and escalated in a timely manner as required.
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Participate in engagements with Regulators as required to evidence robust independent challenge of model used in HSBC.
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Participate in model validation activities as dictated by the Global Model Risk Policy including the assessment of; model inputs, calculations, reporting outputs, conceptual soundness of the underlying theory and the suitability of the use for its intended purpose, relevance and completeness of data, qualitative information and judgements, documentation, and implementation of the model.
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Oversee written reports detailing the results of validations highlighting issues identified during the validation.
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Validate remediation activities completed by the ILOD to ensure appropriate resolution of identified issues.
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Work with relevant stakeholders to embed new Global Model Risk Policies and Procedures.
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Provide model users, model owners, senior management, audit, and regulators (across 1LOD, 2LOD, 3LOD) with confidence that the models and tools developed, maintained, and used within the Group are compliant with internal and regulatory expectations and fit for the intended purpose.
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Participate at Governance Forums as required
Leadership & Teamwork:
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Provide functional leadership for a small team of Model Validators operating across geographies and the HSBC matrix.
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Support the recruitment and retention of junior colleagues and provide coaching and guidance.
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Lead model validation activities including planning and stakeholder management.
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Deliver, high quality, timely validation reports that add value to the business.
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Liaise with 1LOD and other model stakeholders as appropriate to ensure issues have been adequately resolved.
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Communicate across technical quantitative, business and strategic levels to ensure that stakeholders understand the implications of model risks and limitations.
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Support the interaction with Group Internal Audit on model related audits, MSIIs and audit issues and ensure oversight on the implementation of any audit recommendations.
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Participate in engagements with Regulators as required to evidence robust independent challenge of models used in HSBC.
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Deputise for the Global Head of the Function as required at key Governance and Working Group meetings.
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Support the interaction with Group Internal Audit on model related audits, MSIIs and audit issues and ensure oversight on the implementation of any audit recommendations.
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Help build management, regulatory, and external confidence in all models used across the group.
To be successful you will:
Knowledge:
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Detailed technical knowledge of modelling methodologies, techniques and regulations for the functional area.
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Detailed knowledge of statistical model and scorecard development techniques.
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Knowledge of Risk models, performance metrics and risks and associated issues.
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Knowledge of internal procedures and local regulations and those of other country regulators.
Experience:
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Experience with some statistical modelling software / programming language e.g. SAS, Python, R, Matlab, C++, VBA.
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Experience of developing and Risk models throughout the customer lifecycle.
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Experience of presenting recommendations to Senior Management and Stakeholders.
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Experience of conducting independent model reviews.
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Proven track record of leading teams, ideally across geographies and matrixes.
Skills:
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Ability to present complex statistical concepts and results to non-technical audiences in a persuasive and compelling manner.
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Team-oriented mentality combined with ability to complete tasks independently to a high quality standard, and to manage situations with incomplete information.
Qualifications:
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Master’s or PhD degree in a quantitative discipline like Financial Mathematics, Statistics, Econometrics, Quantitative Finance, Economics or Engineering.
Others:
The job holder will be required to:
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Support the management of model risk across a large complex banking group.
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Manage multiple senior stakeholder relationships across the HSBC matrix.
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Represent HSBC with external parties including Auditors and Regulators.
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Manage model risk whilst significant transformational activity is being implemented, both regionally and globally.
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Operate and influence within a changing and rapidly developing regulatory environment.
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Continually support HSBC's approach to conduct and cultivate a positive risk aware culture, which is designed to ensure we deliver fair outcomes for our customers and do not disrupt the orderly and transparent operation of financial markets.
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Maintain awareness of operational risk and minimise the likelihood of it occurring, including its identification, assessment, mitigation and control, loss identification and reporting in accordance with the HSBC Operational Risk Management.
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Adopt a risk management and internal control structure, referred to as the Three Lines of Defence, to ensure it achieves its commercial aims while meeting regulatory and legal requirements and its responsibilities to stakeholders, customers and staff. All staff must familiarise themselves and adhere at all times with the role and supporting responsibilities they play in the Three Lines of Defence.
You’ll achieve more at HSBC
HSBC is an equal opportunity employer committed to building a culture where all employees are valued, respected and opinions count. We take pride in providing a workplace that fosters continuous professional development, flexible working and, opportunities to grow within an inclusive and diverse environment. We encourage applications from all suitably qualified persons irrespective of, but not limited to, their gender or genetic information, sexual orientation, ethnicity, religion, social status, medical care leave requirements, political affiliation, people with disabilities, color, national origin, veteran status, etc., We consider all applications based on merit and suitability to the role.”
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