Voices in Risk Management - Kiyomi Carbone
Kiyomi Carbone rose to her model risk manager position by demonstrating an aptitude and passion for data and organization—and a commitment to continuous learning. In this “Voices in Risk Management” interview, Carbone discusses early career goals, life as a model risk manager, the importance of two-way communication with the first line, and the satisfaction of paying it forward with her mentoring relationships.?
On her role as VP, model risk manager at Rockland Trust??
One of my primary responsibilities is to create a model risk management (MRM) program aligned with regulatory requirements and achieve enterprise-wide implementation. That involves establishing processes, training stakeholders on those processes, monitoring for adoption, and promoting a healthy risk management culture. As with other risk domains, MRM has a “first line of defense” that owns the models and model risk and a “second line of defense” that measures and reports the risk.??
My other main responsibilities are to oversee the second-line functions outlined in the MRM program. This includes specific tasks such as maintaining the central inventory of models and tools, ensuring that validations are conducted appropriately based on the criticality of the model, and conducting regular reviews of models to keep our information current. One of the more elusive second-line functions is to provide effective challenge. Essentially, this means engaging stakeholders to accurately identify and assess their models, to justify their use of models and the underlying assumptions and data, and to bring about actions that keep the bank’s model risk within a set appetite.??
On what’s enjoyable about the job??
I get to learn so much in this position. It combines the best parts of being in academia with the opportunity to work with my colleagues across the bank. I probably get to work with more people in different areas of the bank than everybody except HR or a training team. That is very rewarding. And being able to design and develop a model risk management program … what an amazing opportunity.??
Researching, gathering information, and the career and personal growth aspects are my favorite elements. I start most mornings early to give myself time for quiet, uninterrupted work—reading a validation report, staying current on what’s happening in the industry, or developing our processes. There’s always something that can be improved.?
On how she approaches the use of contract model validators?
We use a lot of external resources to validate our models. One big benefit of external resources is increased information flow—they know what regulators are asking, they pick these things up from other banks’ best practices. I want all that new information coming in to benefit the bank and our model owners, so it’s important that outside validators have the right cultural fit for Rockland Trust. Ideally, I can bring in someone with practitioner experience who is able to speak the language of our business units that are deploying models. I want contractors to know the issues our business units are dealing with, their priorities, success metrics, and pain points. We are more likely to incentivize improvement if model risk management is geared toward the first line’s success metrics as opposed to going through a second-line checklist.??
On how she became interested in banking and model risk management??
I stumbled into banking, and then a mix of curiosity, good mentors, and stretch opportunities led me to model risk management. I began in an entry-level position with Boston Financial Data Services, and despite progression within their call center and correspondence team, the long commute wore on me. When a quality assurance position at a Rockland Trust call center popped up online, I jumped at the opportunity. It was just four miles from my house, so it was a no-brainer. Much more importantly, Rockland Trust was an acquisitive, growing bank with an excitement for process improvement in the call center. And in my position, I was given the latitude to make those improvements.??
Then, through presenting to certain groups, I became familiar with more and more parts of banking. I started standing up programs, including for data governance. Then I was asked to develop and implement a process for model risk. There was a big learning curve but if you give me anything to learn, I will get interested. For example: Did you know that winter wheat is one of the few things that restores nutrients to the soil? There’s no real need to know or be interested in that. But I like to garden and I would like tomatoes that taste better. And I can only rotate my tomatoes to so many places. So I read and ask questions. That’s how I found out about winter wheat. The more you learn, the more interested you are. It’s the same thing with models and model risk. There’s still a lot that I’m learning about models, emerging methodologies, and the business processes that require them. I get excited just talking about it.?
On the importance of communicating with first-line colleagues to properly manage model risk?
Model risk managers need to understand the first line’s requirements and limitations while also clearly communicating how and why model risk should be managed. There needs to be flexibility also. Risk management should be a conversation. Often we say “conversation” but we really mean “I am going to come and speak to you. And you will do what I say.” That’s not a conversation. I shouldn’t come to a conversation assuming that everything I think is going to be true.???
Communication also needs to be frequent. It needs to be ongoing. It needs to be current. It’s about perpetually looking for the best way for us to protect the decision-making process. I can’t talk to first-line colleagues just once a year. You don’t build a relationship or effect change that way.??
On why RMA’s Model Validation Consortium and other industry groups can boost risk management capabilities?
I am honored to represent Rockland Trust on the MVC. I find it to be the most valuable resource that I have as a growing model risk manager. Groups like the MVC can provide interpretations of regulations, emerging best practices, and targeted subject matter expertise.?
You have practitioners coming together and vetting their processes. You also have RMA producing content about best practices. This helps us to set our strategies, and helps us to think things through in an area that’s not as established as other risk disciplines.???
I can also point to the MVC as an authoritative source. I can provide the material and content the MVC produces to the first line. They can hear something in a different voice than mine that offers a fresh perspective. Good information can help to ameliorate fear my first-line colleagues have regarding MRM requirements. If you have that extra weight of the industry behind you, it’s going to be easier to make your case.??
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On early career goals??
I wanted to be a publishing house acquisitions editor. I thought the most amazing job would be to endlessly receive new material to read and then decide “this is what we will publish. This is what we’ll use.” Because what is better than spending all day reading and assessing the quality of things? I haven't thought of this in a while, but reading and assessing is actually about a quarter of what I do. I get material and I get to sit and read it, and that is one of my favorite parts about being a model risk manager.?
On education??
If you can learn how to learn and you can learn how you think—and then how to communicate what you’ve learned—you can do anything. Communication is a big part of any position. That said, formal education in the field is also important. I earned my MBA in finance at Cambridge College because I recognized that gap in my education. Being in banking and finding I really like this industry, I wanted to, with structure and formality, fill in more on the finance side.?
On the importance of mentorships?
Mentorship doesn’t always look official. But it’s priceless. Good mentorship will shorten your learning curve. A good mentor will help you figure out if you are comfortable managing or if you’re more comfortable being a subject matter expert and an individual contributor. A good mentor will help you to learn from their mistakes so that you don’t make the same mistake.??
Mentors will direct you to the right places, and to the most fruitful and relevant information sources. In a way, they might act as your own personal acquisitions editor: “Here are the pieces to read first. This is what is being talked about. Understand this and you’ll be able to earn a seat at the table.”?
I would still probably be plugging away in the call center at Rockland Trust if it weren't for a mentor who pulled me aside and said, “Let me show you other parts of banking.” Some mentors can help by giving you advice. Others have the clout to open doors for you. They’re both valuable. I try to pay it forward. I’m delighted that the three people I’ve recently mentored have all had significant promotions that they find rewarding. They've been able to further their education, earn a better paycheck, and they’re in a field that they’re more excited about.??
On the books that have influenced her?
One of the things I most appreciate about books is the opportunity to have experiences vicariously that temporal constraints make otherwise impossible. When it comes to books that shaped the way I think as a person, perennial teachers are:?
As for books more in the business sphere, “Resonate” influenced my presentation style, “Reinventing Jobs” gave me a more structured approach to operational efficiency, and “Think Again” strengthened my approach to change management.??
Professional??
Rockland Trust, Hanover, Massachusetts?? VP, Model Risk Manager, 2022-Present? AVP, Data Governance Officer, 2020-2022? Banking Officer, Technology and Operations Analyst, 2019-2020? Executive Assistant to Chief Technology and Operations Officer, 2017-2018? Quality Assurance Coordinator, 2016-2017?
Boston Financial Data Services? Customer Service Representative, 2015-2016?
Education??
Cambridge College? Boston, Massachusetts? MBA, Finance?
Brigham Young University? Provo, Utah? Bachelor’s Degree, English??
*The comments have been edited for length and clarity.