Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 588

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 588
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 ensuring a consistent and standardised 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 16 must 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, we add new models to our IT systems. Because this is another source of model risk, technical teams and model owners test proper model integration based on methodology and expectations.

7. Monitoring and control

We regularly review models so that they are working correctly and that they are suitable for their purpose. Otherwise, they must be adapted and redesigned. Control teams must make sure models are managed according to the general model risk framework and other related internal rules.

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;

• continuous improvement of the IRB regulatory models to meet supervisory expectations and adaptation to the new FRTB regulatory framework;

• review of the model inventory from the point of view of the five global businesses, thus enabling effective model risk management aligned with the Group's strategy .

16 The ERC, model approval forum (MAF), local model governance bodies or the model owner will approve models based on model type or use (regulatory or not); if the model is local or global; the type of amendment to the model; global tiering; and the powers delegated to each subsidiary.

Annual report 2024 550

| Contents |     | Business model and strategy |     | Sustainability statement |     | Corporate governance |     | Economic and financial review |     | Riskmanagementandcompliance |

#### 8. STRATEGIC RISK
8.1 Introduction Strategic risk is the risk of loss or damage arising from strategic decisions or their poor implementation, or the inability to adapt to a changing environment, which may impact the medium- and long-term interests of our key stakeholders. Grupo Santander’s business model is a key element of our strategic risk. It must be viable, sustainable and capable of generating results in line with our annual objectives and in a manner that is consistent with the Group's long-term vision. Strategic