African Bank has entered into a strategic collaboration with SAS, a global leader in Data and AI, to modernise its model governance capabilities. The solution will be delivered as a SAS-hosted managed service on Amazon Web Services (AWS) infrastructure. This deployment represents the first implementation of SAS's hosted managed services on AWS in South Africa, marking a significant milestone in African Bank's ongoing digital transformation agenda.
"Models play a central role in how modern financial institutions operate, underpinning critical decisions across credit, fraud detection, capital management, and regulatory compliance," said Maureen Tsaagane, Senior Manager: Model Risk & Analytics at African Bank. "As our modelling environment grows in complexity, so must our governance frameworks. This partnership enables us to establish a comprehensive governance platform that allows our teams to redirect capacity toward innovation while maintaining the highest levels of control and transparency."
The rising complexity of model risk
Since the 2008 financial crisis, financial institutions worldwide have faced heightened regulatory expectations regarding model governance. Global frameworks such as the Federal Reserve's SR 11-7 guidance, the European Banking Authority's stress testing regimes, and evolving local regulations have made transparent model oversight a core business requirement. Despite these developments, many banks continue to manage models manually across fragmented processes, limiting scalability and increasing operational and regulatory exposure.
For banks in Africa, the growing scrutiny on model risk is not only coming from global regulators but also from local supervisors, rating agencies, and increasingly sophisticated shareholders who expect greater transparency into how institutions manage financial exposures. As artificial intelligence (AI) and machine learning (ML) models become more deeply embedded in credit scoring, fraud detection, and capital allocation, questions around model governance, fairness, and explainability are moving from technical teams into executive boardrooms.
African Bank's implementation of SAS Model Risk Management provides an integrated governance framework that delivers full visibility across every stage of the model lifecycle. The platform supports model development, validation, review, approval, ongoing monitoring, and retirement within a single governed environment. The result is a more controlled and auditable process that enables African Bank to respond confidently to both internal governance needs and external supervisory expectations.
Positioning model risk as a strategic priority
Model risk is no longer confined to regulatory reporting. Increasingly, it is shaping business strategy as banks expand their reliance on models for personalising customer experiences, refining credit assessments, detecting financial crime, and optimising capital deployment. These models now include both traditional statistical methods and advanced AI-driven approaches, creating new governance challenges that require cross-functional teams spanning data science, risk, compliance, and business leadership.
"Model risk is not just about identifying weaknesses in models it's about ensuring the reliability of the tools that shape business strategy. By proactively managing model risk, we enhance trust in model outputs, empowering leadership to act with greater confidence, agility, and precision," says Tsaagane.
SAS has been recognised as a global category leader in Model Risk Management for 11 consecutive years by Chartis Research, highlighting its strength in delivering end-to-end model lifecycle solutions that combine data governance, validation workflows, inventory management, and transparent reporting.
"Model risk has become a strategic conversation at the board level because the consequences of unmanaged model failures extend far beyond compliance. A single flawed model can result in financial losses, operational breakdowns, and reputational damage," said David Cosgrave, SAS South Africa Country Manager. "With SAS, African Bank will have complete oversight of every model, every version, and every associated risk rating, governed within a fully traceable and defensible framework."
Leveraging cloud-native scalability
The solution will operate as a SAS-hosted managed service on AWS, aligning with African Bank's broader cloud transformation roadmap. This hosted environment eliminates the need for African Bank to recruit scarce specialist resources to maintain and scale its model risk infrastructure. Instead, internal teams can focus on accelerating strategic initiatives while benefiting from the flexibility, scalability, and resilience inherent in cloud-native operations.
Cosgrave noted that this deployment reflects a growing trend among financial institutions that are modernising model risk governance while simultaneously adapting to more dynamic regulatory environments.
"The combination of SAS's analytics leadership with the scalability of AWS allows institutions like African Bank to future-proof their model risk operations and respond with agility as both supervisory guidelines and modelling technologies continue to evolve," said Cosgrave.
Advancing African Bank's broader transformation
The implementation is part of African Bank's wider strategy to build a more resilient, innovative, and customer-centric financial institution. The bank is investing in advanced data science capabilities, strengthening risk oversight, and building the operational agility required to deliver more personalised financial products while maintaining robust governance controls.
"This initiative reflects our long-term commitment to innovation, operational resilience, and customer trust. By strengthening our model risk governance, we are equipping the bank to serve our customers more responsibly, even as financial services continue to evolve in a data-centric economy," concluded Tsaagane.