Definition #
ML systems quantifying operational, financial, and strategic risks.
Key Characteristics #
- Stress testing
- Black swan event detection
- Regulatory alignment
- Mitigation planning
Why It Matters #
Reduces unexpected losses by 65% in financial institutions (Accenture).
Common Use Cases #
- Credit risk assessment
- Supply chain disruption
- Geopolitical risk analysis
Examples #
- SAS Risk Management
- Riskified
- Palantir Foundry
FAQs #
Q: Model validation?
A: Backtesting against historical crises required quarterly.
Q: Explainability needs?
A: SR 11-7 compliance requires clear risk factor attribution.