Model risk

Model risk is when a computer model does not work correctly and gives wrong results. A computer model is like a big calculator but it has the ability to process and analyze large amounts of data. When a computer model doesn't work correctly, it may result in bad decisions being made based on the wrong information. This could lead to losses of money or time, or other problems. In many industries like banking, insurance, and finance, companies have to make sure they are careful with their models to avoid model risk.