SR 11-7 (Model Risk Management)
The foundational US Federal Reserve guidance for managing risks associated with the use of models in banking.
While pre-dating the modern AI boom, SR 11-7 is the benchmark for Model Risk Management (MRM). It requires rigorous validation, independent review, and an ongoing Model Inventory. For AI/ML, it emphasizes managing black-box risk and ensuring the model's conceptual soundness matches its intended business purpose.
A US commercial bank subjects its new ML-based fraud detection system to an independent validation team that stress-tests the model's logic against SR 11-7 standards before it moves to production.
“What used to take weeks of manual reviews and policy work is now structured and auditable in Enzai within minutes. It’s the first time AI governance has felt operational, not theoretical.”
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