There is a growing trend for the use of various statistical models in the decision-making process in the financial sector. Such models are widely used in lending, financial accounting and risk management. The use of mathematical and statistical models in retail sector lending is especially growing. The models based on machine learning and artificial intelligence algorithms are now used more often. This increases the effectiveness of the model, but also complicates its analysis and risk assessment.

To address this challenge, the National Bank developed the Regulation on Managing Risks for Data-based Statistical, Artificial Intelligence and Machine Learning Models.The purpose of the Regulation is to promote effective risk management of the model. It sets out the basic principles of model building, validation and application. Principles and standards for model risk management are based on current practices, challenges and advanced international supervisory experience in the financial sector. This framework will smooth the wider and more efficient use of models in the financial sector.