Illustrative scenario
Consider a financial institution using multiple lending platforms and analytical models. Each product has its own underwriting context, decision process, and operational requirements.
A common governance approach can help teams examine how decision factors are recorded and translated into explanations. It must preserve meaningful product differences and the actual reasons for each decision.
The business challenge
The challenge is to connect model outputs, policy rules, human judgment, and customer-facing explanations without assuming that a generic model explanation is a complete decision reason.
Compliance, credit, model-risk, and operations teams would need to review the mapping logic, factor hierarchy, exceptions, and notice process. Testing should cover edge cases and relevant product variations.
Proposed approach
The proposed Cicrim approach combines documented explanation methods with governed reason mapping. Two capabilities provide the foundation:
- Explanation framework: Document the relationship between model factors, policy conditions, human review, and the final decision.
- Governed reason mapping: Maintain reviewed product-specific mappings, factor priorities, test cases, and change records.
The implementation would establish ownership for mappings, test cases, change approvals, limitations, and periodic review. Decisions and overrides would retain sufficient context for independent assessment.
A pilot should compare proposed explanations with the factors actually used by the lending process. Findings would inform revisions and the decision about whether the approach is suitable for deployment.
Benefits to evaluate against the institution’s baseline:
- Explanation consistency: Test reproducibility within each approved product and decision process.
- Review quality: Assess whether reviewers can trace an explanation to the actual decision factors.
- Operational clarity: Track unclear mappings, escalation requests, and unresolved exceptions.
- Control evidence: Evaluate ownership, testing, approval, and periodic review records.