AI Audit Trails for South African Insurers: What POPIA Section 71 Requires
TL;DR South African insurers running AI-driven underwriting or claims decisions carry more than a model risk question. They carry a specific legal restriction under the Protection of Personal Information Act, one that applies the moment a decision affecting a policyholder or claimant runs solely on automated processing. Meeting it does not mean avoiding automation. It […]
Model Explainability for South African Banks and Insurers: SHAP, LIME, and What a Supervisor Expects
TL;DR South African banks and insurers are being asked, for the first time from a joint regulatory source, to name the method behind an AI-driven decision rather than describe the decision alone. FSCA and the Prudential Authority’s first joint report on AI in the financial sector points to two specific techniques, SHAP and LIME, as […]
Building a Propensity Model in Banking: Where the Real Risk Hides
TL;DR A propensity model that ranks customers well on a spreadsheet and then fails the moment it meets production data has usually skipped one of three steps: it was never validated on a genuinely independent holdout, nobody checked whether its probabilities were calibrated, or it shipped without an audit trail. Getting the ranking right is […]
The Four Terms Everyone Confuses With Model Risk Management
TL;DR Someone on a risk or technology team asks what model risk management actually covers, and the answers they get back use “governance,” “validation,” and “monitoring” as if they all mean the same thing. They don’t. Each is a real, specific piece of the job. Model risk management is the discipline that holds all of […]
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 […]
Model Governance for AI Collections in South Africa: Meeting FSCA Validation Standards and Basel III Requirements
TL;DR The KPMG South Africa Ten Key Regulatory Challenges for 2025 places AI model validation and continuous monitoring at the centre of the financial services governance agenda, identifying these as the most critical technical requirements that South African banks must address for AI systems: rigorous testing and validation before deployment, continuous monitoring after deployment, and […]
