Yeilds.io, a Belgium–based AI platform for model risk management, has raised €1.25m in seed financing.
The round was led by led by Volta Ventures, with participation from Pamica NV, the investment company of Michel Akkermans, former chairman and CEO of Clear2Pay and FICS, is co-investor. Following the funding round, both Akkermans and Volta with join the company’s board.
Yields.io offers automated model monitoring and validation services to the financial sector, identifying issues in algorithms and turning them into actionable business insights. Founded April 2017 by James D’Aquino, Sébastien Viguié and Jos Gheerardyn, the company claims its solution provides C-level executives with a real-time comprehensive overview of all model risk across the enterprise.
Along with increasing transparency for C-level execs, its offering also claims to detects model issues as they happen, lower regulatory capital through improved models, shorten validation timelines via automation, and provide a best practice approach to model risk governance.
In order to comply with increasingly strict ECB requirements related to the use of mathematical models, several Tier 1 investment banks are already piloting Yields.io’s platform according to the company.
Cofounder and CEO Jos Gheerardyn said: “After the credit crisis and the London Whale incident, model risk – which is the risk one takes by using mathematical models – has become center stage in the financial industry. The process of model testing is currently very manual. As a consequence, banks can hardly keep up with the increased requirements around model governance. Yields.io leverages A.I. to bring more transparency to this process and to empower model validators, model users and managers alike with a highly scalable and structured solution.”
It plans to use the funds to build out an international sales team and increase its marketing activities according to Akkermans. The financial services industry is facing an ever-increasing requirement for model validation with ECB requirements and regulation such as CCAR, FRTB, and IFRS9 models. With an increased demand for risk mitigation and forecasting, banks and other financial institutions have created new risk models which each require model validation.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
