model overlay
What It Means
A model overlay is when humans manually adjust an AI model's inputs or outputs because they know the model has limitations or blind spots. It's essentially a human override that compensates for known weaknesses in the model's training data, design, or performance in certain situations.
Why Chief AI Officers Care
Model overlays represent potential governance and audit challenges because they introduce subjective human judgment into supposedly objective AI systems. CAIOs must ensure these manual adjustments are documented, justified, and consistently applied to maintain regulatory compliance and model reliability. Excessive reliance on overlays may also signal that the underlying model needs retraining or replacement.
Real-World Example
A credit scoring model consistently underestimates risk for certain geographic regions due to limited training data from those areas. The risk team applies a model overlay by manually increasing risk scores by 15% for loan applications from those regions until they can retrain the model with better regional data.
Common Confusion
People often confuse model overlays with regular model updates or retraining, but overlays are temporary manual fixes applied on top of an unchanged model. Unlike permanent model improvements, overlays are band-aid solutions that should eventually be eliminated through better model development.
Industry-Specific Applications
See how this term applies to healthcare, finance, manufacturing, government, tech, and insurance.
Healthcare: In healthcare AI, model overlays are critical when clinicians override or adjust AI diagnostic or treatment recommendati...
Finance: In finance, model overlays are critical adjustments applied to quantitative models for credit risk, market risk, or valu...
Premium content locked
Includes:
- 6 industry-specific applications
- Relevant regulations by sector
- Real compliance scenarios
- Implementation guidance
Technical Definitions
NISTNational Institute of Standards and Technology
"Judgmental or qualitative adjustments to model inputs or outputs to compensate for model, data, or other known limitations. A model overlay is a type of override."Source: Comptroller_Office
Discuss This Term with Your AI Assistant
Ask how "model overlay" applies to your specific use case and regulatory context.
Start Free Trial