Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 212

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 212
---
 the Group centralised inventory, a single platform based on an uniform taxonomy for all models used in the business units. This inventory is key for sound management, as it contains all relevant information of each model, enabling to closely monitor them according to their relevance and the tiering criteria.

#### 2. Planning
An internal annual exercise approved by our subsidiaries’ governance bodies and reviewed in an aggregated form, which formulates strategic measures for models managed by the Model Risk area and pinpoints needs for any models to be developed, reviewed or implemented during the year.

#### 3. Development
The Models unit, both at corporate and local level, is responsible for the development of the models according to the needs of each subsidiary following the Group methodological standards that promotes the quality of the models. Development by a specialized team guarantees a more efficient execution.

#### 4. Internal validation
Independent model validation is a regulatory requirement and key feature of our model risk management and control.

A specialist unit that is totally independent from developers and users issues technical assessments of internal model suitability. These assessments are expressed through a rating that summarizes the model risk associated to it. Validation intensity and frequency are well-defined and risk-driven.

The unique validation approach led by the Single Validation Office strengthens the second line of defence ensuring a consistent and standardized model risk management across the Group. It has allowed a greater decentralised organizational structure.

#### 5. Approval
Before the model´s implementation and use, internal governing bodies have to approve it through a governance circuit in place for our model inventory, based on its level of importance.

#### 6. Implementation and use
In this phase, new models are added to the IT systems. Due to this being another source of model risk, technical teams and model owners test proper model integration based on methodology and expectations.

#### 7. Monitoring and control
The models are regular reviewed to ensure functionality and are suitability for their purpose. Otherwise, they have to be adapted and redesigned . Control teams have to make sure models are managed according to the general model risk framework and other related internal rules.

#### 11.2.3. Main activities in 2024
To strengthen the Group's model risk culture and position Santander as a benchmark in this area within the banking industry, in 2024 our strategy has focused on:

• implementation of the IV Next project for the evolution of the validation function, reinforcing the identification of root causes of incidents and the binding role of the Internal Validation teams;

• technological transformation and simplification of the function towards a more efficient model