Case Study: HSBC reduces model validation effort with Yields.io

HSBC cuts model validation effort by 57% with Yields.io

HSBC, a major global bank, faced a significant challenge in managing the immense regulatory burden of its Wholesale Internal Ratings-Based (IRB) credit risk models. The bank's Model Risk Management function was executing over 100 labor-intensive revalidations annually, a process that historically took two to three months per model. To address this resource drain, HSBC partnered with vendor Yields.io to automate the validation process using its software platform.

The solution implemented with Yields.io automated the calculation of quantitative metrics and the drafting of comprehensive validation reports. This allowed validators to simply upload data, after which the system would generate a 50-to-100-page document within minutes. As a result, Yields.io helped HSBC reduce its overall validation effort by 57%, cutting the end-to-end timeline from months to just 3-4 weeks and the human review time to only 2-3 days per model. The automation also ensured globally consistent, audit-ready report quality that was commended by regulators.

HSBC