In 2023, the digital asset market grew rapidly. Market capitalisation doubled—from around $830 billion to $1.6 trillion. This sharp rise highlights the growing need for strong model governance and validation. As digital assets expand, so do the risks. Firms must ensure their models are accurate, well-managed, and fit for purpose in a fast-changing environment.
However, there is still debate on how best to do this. As the market evolves, so do the risks and regulatory expectations. Firms must ensure their models are robust, accurate, and fit for purpose. This is especially true in areas like anti-financial crime, fraud detection, and risk management, where poor model performance can have serious consequences.
Model validation plays a key role. It helps firms understand how models behave, where they may fall short, and how to improve them. With digital assets, this becomes more complex. Data is often limited, fast-changing, and hard to verify. Traditional validation methods may not be enough to address these challenges.
The whitepaper explores these issues in depth. It outlines key risks in digital asset modelling and offers practical steps for validation. It also discusses how firms can adapt their frameworks to meet regulatory expectations and market demands.
Davies brings deep expertise in model validation. Our approach is flexible, risk-based, and tailored to each client. We help firms assess model performance, governance, and controls—across both traditional and emerging asset classes.
Download the full whitepaper to explore the full analysis and recommendations. Get in touch to find out how we can support your model validation needs in the digital asset space.
