CECL is here: Are you ready?


Tuesday, October 4, 2016

By: Lauren Smith Business Chart Report Statistic Planning Analysis Concept The recent AICPA conference highlighted the latest developments in the banking industry, including the Current Expected Credit Loss (CECL). At the conference, John Lankenau from SS&C Primatics discussed analytics that can be used to explain volatility in the CECL estimate and answered questions from stakeholders. The session was well received by the several hundred attendees. Watch a video recap. The conference, which was attended by more than 900 professionals, provided SS&C Primatics a great opportunity to demonstrate the unique offerings of the EVOLV platform. Over the course of the conference, SS&C Primatics engaged with hundreds of representatives from institutions ranging in size from 400 million to more than one trillion in total assets. Attendees were impressed by the breadth of the SS&C Primatics experience and the scalability of the EVOLV platform, confirming that EVOLV is an industry leader when it comes to managing the CECL transition. The EVOLV integrated risk and finance solutions provide:
  • Model execution - combines historical credit loss data with reasonable and supportable forecasts to estimate expected credit losses over the contractual term under a variety of methods (e.g. discounted cash flow, loss-rate, probability of default, transition, etc.)
  • Scenario analysis - compares results over a variety of forecasted conditions
  • Accounting and reporting - calculates the allowance for expected credit losses and aggregates and books journal entries
  • Data management - captures data from multiple sources, stored in a central location, accessible by risk and finance for reporting and analysis
  • Reporting and analytics - attributes changes in the allowance to factors influencing the estimate (e.g. changes in the forecast, portfolio composition, credit characteristics)
EVOLV is the only integrated risk and finance solution flexible enough to adapt quickly and easily to new accounting standards like CECL. In fact, it was recently selected by East West Bank to manage its reserving process under current US GAAP and for transition to the CECL standard by January 2020. See the Press Release for more information.

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