Model Development

Models built to perform — and built to survive validation

We develop quantitative models that generate accurate results for your business while meeting regulatory expectations from day one. Because a model that can't be validated is a model that can't be used.

Discuss Your Project

Our Approach to Model Development

Too many models are built in isolation from the teams that will validate, govern, and defend them. Our dual perspective — as both developers and validators — means we build models with full awareness of what examiners will look for. The result: models that perform well and pass validation without costly rework.

The KDOA advantage: Because our team validates hundreds of models each year, we know exactly what separates models that pass cleanly from models that generate findings. We build that knowledge into every development engagement.

What We Build

Credit & Lending Models

  • Credit scoring and decisioning
  • PD, LGD, EAD estimation
  • CECL / IFRS 9 provisioning
  • Mortgage pricing and prepayment

Risk & Compliance Models

  • BSA/AML transaction monitoring
  • Fraud detection systems
  • Fair lending analysis
  • Stress testing and scenario models

Market & Treasury Models

  • Asset-liability management
  • Interest rate risk
  • Derivative pricing
  • Liquidity risk

AI / Machine Learning

  • Advanced predictive models
  • Bias detection and correction
  • Explainability frameworks
  • Large language model applications

Development Lifecycle

Problem Definition & Scoping

We work with your business and risk teams to clearly define objectives, intended use, data availability, and regulatory context. A well-scoped project is a successful project.

Data Assessment & Preparation

Rigorous data quality assessment, feature engineering, and documentation. We establish the data foundation that determines model reliability.

Model Design & Estimation

Methodology selection, model estimation, and alternative approach evaluation. We document design decisions and their rationale for validation readiness.

Testing & Performance Assessment

Back-testing, out-of-sample validation, sensitivity analysis, and benchmarking. We challenge our own models with the same rigor we apply to validation engagements.

Implementation & Monitoring

We coordinate implementation, develop ongoing monitoring programs, and establish performance thresholds and escalation procedures for sustained model health.

Full Documentation from Day One

Every model we develop ships with comprehensive documentation that satisfies regulatory expectations and supports efficient validation cycles:

Model Documentation

  • Conceptual framework and methodology
  • Data dictionary and lineage
  • Estimation results and diagnostics
  • Limitations and assumptions

Operational Documentation

  • Implementation specifications
  • User guide and procedures
  • Ongoing monitoring plan
  • Performance thresholds and triggers
Have a model development need?

From scoping to implementation, our team will build a model that performs and withstands scrutiny.

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