Current Expected Credit Loss (CECL)

Provides powerful risk data and model management that enhances banks’ ability to meet FASB risk accounting requirements and strengthens risk perspectives

Overview


Device Frame
RISK-SENSITIVE ACCOUNTING

The Financial Accounting Standard Board’s (FASB) new risk-sensitive accounting requirement, Current Expected Credit Loss (CECL), is challenging financial institutions of every size due to implementation of complex manual processes and cost.

IMPACTS ON CREDIT-LOSS RESERVES

Because CECL replaces the incurred loss approach with the requirement to calculate the expected lifetime loss at any point in time, compliance entails significant, time-consuming changes at every step of the allowance calculation process.

CECL is likely to compel banks to increase their credit-loss reserves significantly, which could lessen how much they can lend to companies and individuals.

Questions to Consider

  • What challenges and opportunities do we face with CECL?
  • By how much will CECL increase our credit loss reserve?
  • How does our approach to model management impact CECL adoption efficiency?

  • Are we ready to navigate CECL implementation challenges?
  • How can we minimize implementation costs and delays?
  • Will CECL lead to profit and loss volatility for us?

AxiomSL’s CECL Platform and Integration Engine

Solution

ROBUST END-TO-END SOLUTION

AxiomSL’s end-to-end CECL solution on ControllerView provides the flexibility and auditability required by accounting and risk functions.

Powered by the CECL edition of AxiomSL’s extensible CreditView data dictionary, the solution enhances banks’ ability to satisfy regulatory requirements and strengthens risk perspectives enterprise wide.

CAPABILITIES

  • Automates end-to-end CECL processes and reporting
  • Provides easy, transparent drilldown access to data
  • Delivers report-to-source dynamic data lineage via LineageView
  • Interfaces non-disruptively with systems and processes

  • Directly incorporates open-source language model inputs/outputs and management and integrates access to closed-source models via AxiomSL’s IntegratedModelView capability
  • Aggregates financial, risk, and macro-economic data necessary for accurate CECL calculations
  • Seamlessly ingests data from disparate sources

Device Frame

CECL Solution Process Flow Accommodates Multiple Entry Points

Host the entire CECL process on ControllerView, using the platform to aggregate multiple data sources from different systems, bringing together data from risk, finance, ALM and market data.

AxiomSL’s - CECL Solution Process Flow Accommodates Multiple Entry Points

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Thought Leadership: Traversing the Intricacies of CECL Implementations

Benefits

Provides powerful analytics and end-to-end auditability that deliver complete audit trails including versions of invoked models and developed ECLs

Enables clients to successfully move away from legacy, opaque, Excel-driven and/or black-box models and siloed data-management techniques, to a transparent, traceable and holistic data-driven state

Allows various entry points into the process that adapt to clients’ CECL adoption approaches

Enables clients to house and classify credit data sets and models on a single platform enhancing transparency, efficiency, auditability, and business insight

Provides flexible, centralized control over the orchestration of end-to-end processes for successful CECL adoption

Implements auditable, performance-driven high-volume data management for robust CECL and BCBS 239 compliance

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