By: Lauren Smith
With respect to the transition to CECL, it is imperative that institutions understand the distinction between CECL compliance and CECL success. Achieving CECL compliance means meeting the requirements in the standard and executing the reserving process on time. A successful CECL implementation, on the other hand, is more than just checking a box.
At this year’s conference, SS&C Primatics’ John Lankenau presented for the sixth year in a row during the session entitled “Tackling CECL with a Holistic Approach – So Much More than Models and Calculations”. John’s session explored the immediate transition needs in the context of the long-term goal of a controlled and repeatable process, including:
- Analytics and disclosures that can be used to explain a volatile estimate to stakeholders
- Best practices for integrating the estimation method with inputs and reporting
- Generating application-ready data suitable for use by models and to support multidimensional reporting
CECL will have a wide-ranging impact on financial institutions’ allowance processes, requiring new data elements and new disclosures and analytics in support of a forward-looking credit loss estimate. Rather than addressing the requirements in isolation, a holistic approach will consider the consequences of methodology elections on reporting, data, and a potentially volatile estimate. A holistic approach will be critical to a successful CECL implementation.
EVOLV is the only integrated risk and finance solution that holisitically addresses the end-to-end reserving process in a SOX-controlled manner. For additional information, download our brochure or contact us for a demo at firstname.lastname@example.org or 800-234-0556.