Scott Baranowski discussed the important factors that community bank executives should consider when developing financial models which have increasingly become an integral component of every institution’s normal course of business. He noted that banks are increasingly applying models to more complex products such as enterprise-wide risk management. Scott began by defining a model as an objective method that applies statistical, economic, financial or mathematical theories, techniques and assumptions. He explained a model’s core components consist of information input, processing and reporting. Scott provided key points to consider when developing a model. He emphasized the risk potential from model decisions based on incorrect or misused model inputs. Scott evaluated the benefits and constraints of developing an in-house model versus using an outside expert.