SR 11-7 Model Inventory Requirements for Collections AI: What Counts as a Model in 2026
TL;DR SR 11-7 Model Inventory Requirements for Collections AI: What Banks Must Know in 2026 Most model risk management teams at US banks built their collections governance frameworks years before AI entered the collections workflow. That gap is now visible in examination findings. SR 11-7: Guidance on Model Risk Management, issued jointly by the Federal […]
SHAP Explainability for RBI Examinations: Account-Level Reasoning in NBFC Collections AI
TL;DR An RBI examiner asks for the reasoning behind account 847291’s propensity score during a model validation review. The NBFC’s collections head pulls up the dashboard. It shows a 0.73 score. There is no per-account explanation available, only a portfolio-level feature importance chart. This gap in SHAP explainability for RBI collections model examinations carries a […]
MLOps for Indian Bank and NBFC Collections Models: Retraining Governance and RBI MRM Compliance
TL;DR A ₹7,200 crore NBFC deployed its AI collections model 14 months ago. The Gini has drifted from 0.74 to 0.61. No drift monitoring system was running. No retraining was triggered. No RBI MRM documentation was updated. The next examination is in 6 weeks. This scenario captures the core operational risk facing MLOps for Indian […]
AI Self-Learning Models for NBFC Collections: How the Technology Works
TL;DR A propensity model deployed on a personal loan portfolio in January was trained on 18 months of historical payment data. At deployment, its scores were accurate. Recovery rates improved through the first quarter. By August, the picture has changed. Payment rates in the mid-propensity band have dropped. The model continues to route accounts to […]
Champion-Challenger Testing for SA Banks and Credit Providers
TL;DR A collections model has been running at a South African bank for ten months. It was built on 24 months of payment data, the bulk of it pre-pandemic. It performed well in the first two quarters after deployment. Recovery rates in the 30-60 DPD bucket improved. Cost per recovery came down. In the last […]
Champion-Challenger Testing in AI Collections: A Practical Guide for US Banks
TL;DR A collections manager at a mid-size regional bank has been running the same contact strategy for three years. Recovery rates on early bucket accounts have drifted down four percentage points over that period. The strategy still looks reasonable in the monthly report. The segmentation logic has not changed. The contact sequences are the same […]
RBI Model Validation Requirements for AI Collections: A Practical NBFC Guide
A bridge designed by the same team that built it, inspected by the same firm that constructed it, and opened to traffic on the builder’s own assurance of quality is a structural liability. The work might be excellent. The materials might be sound. But without an independent party verifying both, there is no objective basis […]
The End of the “Black Box”: Why Explainable AI is a Must-Have for Financial Services
Artificial intelligence is no longer a futuristic concept; it is an integral part of the financial services industry, powering everything from fraud detection to loan approvals. While the efficiency and speed of AI are undeniable, the complex, opaque nature of many AI models, often referred to as the “black box”, has created significant challenges. For […]
Why Model Risk Management Matters
Artificial intelligence has moved from experimentation to boardroom priority in a remarkably short time. Most large enterprises now run multiple AI initiatives — fraud detection systems, predictive analytics platforms, generative AI copilots, and customer intelligence tools. Yet one pattern has become increasingly clear to me over the past decade. Many organizations can build AI models. […]
Basel III Model Validation for South African Banks: Meeting Prudential Authority Standards for AI Credit Risk and Collections Models
TL;DR On 24 November 2025, the Prudential Authority of the South African Reserve Bank and the Financial Sector Conduct Authority jointly published a report on artificial intelligence in South Africa’s financial sector. The report drew on analysis conducted throughout 2024 and set out, for the first time in a formal joint publication, the regulators’ view […]
