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Validation Techniques

Ongoing monitoring

Continuous or periodic tracking of a model's performance after deployment, checking that it continues to work as intended as data, markets, or usage patterns evolve, distinct from a full periodic revalidation. Includes outcomes analysis, backtesting, and monitoring of key performance indicators between formal validation cycles.

Last updated: Last reviewed by: Model Risk Directory editorial team

How the term is used in model risk management

Continuous or periodic tracking of a model's performance after deployment, checking that it continues to work as intended as data, markets, or usage patterns evolve, distinct from a full periodic revalidation. Includes outcomes analysis, backtesting, and monitoring of key performance indicators between formal validation cycles. The exact implementation varies by institution, model type, risk rating, and governing framework. Use the linked regulatory pages and buyer guides below for scope-specific requirements.

Related glossary terms

Outcomes analysisBacktestingModel validation

Guides and frameworks that use this term

GuideModel Risk ValidationModel risk validation is the independent testing of a specific model's conceptual soundness, ongoing performance, and outcomes, performed by staff or a third-party firm genuinely separate from that model's development. It is the 'effective challenge' function required under SR 26-2 and SR 11-7, distinct from broader model risk management program design.GuideModel Risk Management SoftwareModel risk management software centralizes a bank's model inventory, tracks validation status and lifecycle events, and automates governance workflows like tiering, revalidation scheduling, and audit-trail documentation. It replaces manual spreadsheet tracking, which becomes unmanageable once an institution has more than a handful of tiered models.FrameworkSR 26-2SR 26-2, issued jointly by the Federal Reserve, OCC, and FDIC on April 17, 2026, is the current US interagency guidance on model risk management. It supersedes SR 11-7 (2011) and SR 21-8 (2021), preserving core disciplines like effective challenge and independent validation while shifting to a risk-based approach tailored to an institution's model risk profile, size, and complexity.